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3 June 2016
Ocean Springs Spa Manager Pleads Guilty to Money Laundering ConspiracyRead the Press Release
Gulfport, Miss. – Yeon Sook Hwang, 41, of Ocean Springs, pled guilty on Thursday, June 2, 2016, before U.S. District Judge Sul Ozerden, to conspiracy to commit money laundering in a case involving the interstate transportation of prostitutes, U. S. Attorney Gregory K. Davis announced today. Hwang was identified as the manager of a massage parlor operating in Ocean Springs at which Korean women would provide sexual services.
Hwang will be sentenced on September 1, 2016, and faces a maximum of 20 years in prison and a $500,000 fine. This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Annette Williams.
New York Man Sentenced in Manhattan Federal Court to 25 Years in Prison for Trafficking of Heroin, Cocaine, and MDMARead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that ROMAN KITROSER was sentenced in Manhattan federal court to 25 years in prison for conspiring to distribute heroin, cocaine, MDMA, crack cocaine, and marijuana. KITROSER, who pled guilty to one count of narcotics conspiracy on November 2, 2015, was also found to have possessed dangerous weapons in connection with the conspiracy, including firearms and hand grenades. KITROSER pled guilty before U.S. District Judge Katherine Polk Failla, who imposed today’s sentence.
U.S. Attorney Preet Bharara stated: “In Roman Kitroser’s drug dealing operations, customers could literally pick their poison: he trafficked in heroin, cocaine, crack, MDMA, and marijuana. To protect his illicit trade, Kitroser armed himself with an arsenal of dangerous weapons, including guns, silencers and even hand grenades. Thanks to the work of the DEA, NYPD and New York State Police, Kitroser’s dangerous business is finished.”
According to the Indictment and other documents filed in federal court, statements made at various proceedings in this case, and evidence presented at the sentencing hearing:
From December 2013, to December 2014, KITROSER conspired to distribute heroin, cocaine, and marijuana as a member of a drug trafficking organization. In connection with his arrest, KITROSER was found in possession of nine firearms, two silencers, high-capacity magazines, and a large press used to form loose narcotics into kilogram-sized bricks. Law enforcement officers also seized more than $2 million, as well as two hand grenades, in connection with the investigation.
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In addition to the prison sentence, KITROSER, 39, of Brooklyn, New York, was sentenced to five years of supervised release.
United States Attorney Bharara praised the investigative work of the Drug Enforcement Administration, the New York City Police Department, and the New York State Police.
The case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorney Megan Gaffney and Alex Rossmiller are in charge of the prosecution.
New Jersey Man Acquitted on Alien Transportation ChargeRead the Press Release
ALBANY, NEW YORK – A jury voted today to acquit Cumhur Aydin, age 45, on a charge of transporting an alien.
Aydin, of New Jersey, was indicted on January 6, 2016 on a single charge of transporting, in Franklin County, New York, an alien who had no right to be present in the United States.
The jury voted to acquit Aydin following a three-day trial in Albany before Senior U.S. District Judge Frederick J. Scullin, Jr.
NCMEC CEO Visits the USNCBRead the Press Release
On Tuesday, May 31, 2016, Director Shank met with NCMEC CEO John Clark to discuss continued collaboration between the two organizations. Mr. Clark is the former Director of the U.S. Marshals Service.
Muskogee Man Pleads Guilty to Theft of Government FundsRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that ENRIQUE GONZALEZ a/k/a Henry Gonzalez, age 44, of Muskogee, Oklahoma, pled guilty to an Information filed on May 27, 2016, charging him with THEFT OF GOVERNMENT FUNDS, in violation of Title 18, United States Code, Section 641, punishable by not more than 10 years imprisonment, up to a $250,000.00 fine or both.
The Information alleged that beginning on or about August 13, 2015, and continuing until on or about November 21, 2015, within the Eastern District of Oklahoma, defendant ENRIQUE GONZALEZ a/k/a Henry Gonzalez, did knowingly and willfully embezzle, steal, and purloin money of the Department of Veterans Affairs, a department or agency of the United States, namely, Department of Veterans Affairs Educational Benefits payments to which he knew he was not entitled, having a value in excess of $1,000.00.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, accepted the defendant’s guilty plea, and ordered the completion of a presentence report. Sentencing will be scheduled upon its completion. The defendant remains on bond pending sentencing.
The charges are a result of an investigation by the Department of Veterans Affairs, Office of Inspector General.
First Assistant United States Attorney Doug Horn represented the United States.
Mexican Man Sentenced for Illegal Reentry After DeportationRead the Press Release
CONCORD, NEW HAMPSHIRE – United States Attorney Emily Gray Rice announced that Jose Villavazo-Gutierrez, 25, of Mexico, pleaded guilty to illegally reentering the United States after having been previously deported. Villavazo-Gutierrez, was arrested on February 17, 2016. He was sentenced to time served and is subject to deportation.
On February 17, 2016, ICE-ERO Deportation Officers encountered the defendant when they were at a residence in Nashua, New Hampshire, during an attempt to locate another individual at the residence. The defendant was an occupant at the residence. The defendant did not have any identification, told the agents that he was from Mexico, and admitted that he did not have any immigration documents which would allow him to be legally in the United States.
The Deportation Officers submitted the defendant’s fingerprints for comparison to databases of known fingerprints. The fingerprint impressions submitted were a match to those taken from the defendant on the occasion of his previous deportations from the United States to Mexico in 2014.
The case was investigated by the U.S. Department of Homeland Security, Bureau of Immigration and Customs Enforcement and prosecuted by Assistant U.S. Attorney Alfred Rubega.
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Men Charged with Armed Robberies of West Haven Post Office and Hamden BankRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that a federal grand jury in Bridgeport returned an indictment today charging DERRICK WHITE, also known as “Fly,” 51, of Hamden, MALCOLM HAYNES, also known as “Black,” 25, of New Haven, and HOWARD BOOKERT, 18, of Hamden, with one count of armed robbery of a postal employee. The indictment also charges WHITE and HAYNES with one count of armed bank robbery.
The indictment alleges that, on April 21, 2016, WHITE, HAYNES, and BOOKERT entered the U.S. Post Office located at 75 Farwell Avenue in West Haven, stole money and other government property, and put the life of a postal employee and others in jeopardy by the use of a dangerous weapon.
The indictment further alleges that, on April 21, 2016, WHITE, HAYNES, and another person known to the grand jury used force, violence and intimidation to rob $9,287 from a branch of Wells Fargo Bank located at 1647 Whitney Avenue in Hamden, putting in jeopardy the life of a person by the use of a dangerous weapon.
WHITE and BOOKERT have been detained since April 21, 2016, when they were apprehended in New Haven and arrested on related state charges. HAYNES has been detained since his arrest on related state charges on May 23, 2016.
If convicted, the defendants face a maximum term of imprisonment of 25 years and a fine of up to $250,000 on each count.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the West Haven Police Department, Hamden Police Department, New Haven Police Department, Federal Bureau of Investigation, and U.S. Postal Inspection Service. The case is being prosecuted by Assistant U.S. Attorney Anastasia E. King.
Maryland Man Pleads Guilty to Conspiring to Commit ArsonRead the Press Release
ABINGDON, VIRGINIA – A Dundalk, Maryland, man who had been a fugitive for four years before being apprehended in Florida, pled guilty yesterday in Federal Court to conspiring to commit arson, United States Attorney John P. Fishwick Jr. announced.
William Antonion Parks, 26, pled guilty yesday in the United States District Court for the Western District of Virginia in Abingdon to one count of conspiring to destroy, by fire, a motor vehicle. On October 9, 2011, Parks and two other men, James Robert Gurganus and Jeremiah D. Lawson, set fire and destroyed a vehicle in Lee County, Virginia. Gurganus and Lawson pled guilty and were sentenced several years ago. Parks fled after the fire and had been at large until his arrest in Florida by agents of the United States Marshal’s Service in March of this year.
“This individual not only put others at risk by committing arson and destroying a motor vehicle, but he also felt he could flee from justice,” Unite States Attorney John P. Fishwick Jr. said today. “I am grateful to our law enforcement partners both here in Virginia and in Florida who continued to search for this defendant and ultimately held him accountable for his criminal actions.”
United States District Judge James P. Jones scheduled sentencing for August 30, 2016 at 10:30 a.m. Parks faces a mandatory sentence of imprisonment for a term of not less than five years and no more than twenty years and a fine of up to $250,000.
The investigation of the case was conducted by the Bristol Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Lee County Sheriff’s Office. Special Assistant United States Attorney Albert Mayer and Assistant United States Attorney Randy Ramseyer prosecuted the case for the United States.
Man Sentenced to 51 Months in Prison for Bank RobberyRead the Press Release
WASHINGTON – John C. Matthews, 67, of no fixed address, has been sentenced to a 51-month prison term after earlier pleading guilty to robbing a bank last fall in Northwest Washington, announced U.S. Attorney Channing D. Phillips, Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Matthews pled guilty to a charge of bank robbery in February 2016 in the U.S. District Court for the District of Columbia. He was sentenced on June 2, 2016 by the Honorable Emmet G. Sullivan. Following his prison term, Matthews will be placed on three years of supervised release. At the time of the offense, he was on parole for an armed robbery committed in 1978, and his parole had been revoked on six previous occasions.
According to the government's factual proffer, on Thursday, Nov. 12, 2015, at approximately 9:22 a.m., Matthews walked into the PNC Bank located in the 1700 block of Columbia Road NW. He walked up to a teller, began pointing to the front door of the bank, and provided a handwritten note with instructions to read it. Among other things, the note stated “That box contain enough C-4 explosives to cause great harm to people if the gentleman in hard hat push a bottom [sic];” “Fill bags with $100 bills, $50 bills, and $20 bills;” “—No dye packs –No silent alarms – No Traces;” “Fill bags so they easily slide through window opening;” and “Hurry up!!!” At about this time, the man who was wearing a construction-type vest and hard-hat -- and who is still at large -- opened the inner bank door from the vestibule and placed a shoe box in the lobby and then re-entered the bank vestibule.
The teller gave Matthews approximately $1,150 in currency and he and the second man then left the bank. The robbery was captured on bank video and Matthews’s face, unmasked, was clearly visible. By about 11 a.m., law enforcement located Mathews hiding in a rear basement storage room a few blocks away. He was wearing the same clothing as seen in the video of the bank robbery and with the stolen money still on his person. He has been in custody ever since. The bank building was evacuated and MPD’s Explosives Ordinance Disposal Unit was called in while much of the block was cleared. Bomb technicians ultimately determined that there were no explosives in the shoe box that was placed on the floor by the other man.
In announcing the sentence, U.S. Attorney Phillips, Assistant Director in Charge Abbate, and Chief Lanier praised the work of the D.C. Violent Crimes Task Force, which includes members of the FBI’s Washington Field Office, the Metropolitan Police Department, the U.S. Capitol Police, and the U.S. Marshals Service. They also commended the efforts of those who assisted at the U.S. Attorney’s Office, including Paralegal Specialists Teesha Tobias and Candace Battle and Legal Assistant Latoya Wade. Finally, they expressed appreciation for the work of Assistant U.S. Attorneys Vincent Caputy, who indicted the case, and Stephen J. Gripkey, who handled the case thereafter.
Leader of Stolen Identity Refund Scheme Sent to Federal PrisonRead the Press Release
HOUSTON – Ronald Dewayne Hadley has been ordered to prison following his conviction for leading a Houston-area stolen identity refund fraud (SIRF) scheme, announced U.S. Attorney Kenneth Magidson along with Special Agent in Charge Rick Goss of IRS - Criminal Investigation (CI) in Houston.
Hadley pleaded guilty Aug. 28, 2015. Today, U.S. District Judge Melinda Harmon handed him a 48-month term in federal prison to be immediately followed by three years of supervised release. Judge Harmon also ordered Hadley to pay $317,790 in restitution to the IRS.
Three others also pleaded guilty in the scheme - Lyndell Leroy Price, Leondray Demond Garrison and Ryan Duron Clay – who will sentenced at later dates.
“This investigation demonstrates IRS-CI’s ability to detect identity thieves who believe they are protected under the cover of anonymity, said Mary Hammond, Assistant Special Agent in Charge of IRS-CI. “Perpetrators at all levels in a stolen identity refund fraud scheme will be pursued and prosecuted.”
According to information in the respective plea agreements, Hadley led a conspiracy to submit false tax returns to the IRS for tax years 2010 through 2012, which sought fraudulent refunds totaling approximately $811,710. The scheme began in the fall of 2011 when Hadley began to prepare and electronically file tax returns which falsely reported that taxpayers were barbers who had earned no wages but had received thousands of dollars of dividend income. The income was purportedly from supplies on which they had supposedly paid thousands of dollars of fictitious withholding taxes that were entitled to be refunded.
Hadley obtained taxpayer identification information both directly from these individuals as well as indirectly through the assistance of Price, Garrison and Clay. Hadley and his conspirators obtained debit cards in the names of these people whose identities were then used to electronically file false refund claims anonymously via public wi-fi access provided by local fast-food restaurants and a coffee shop. Hadley had the refunds credited to debit cards under the conspirators’ control. The co-conspirators withdrew the fraudulent refunds at local ATMs and used the debit cards at businesses spread across central, north and northwest Houston and Houston’s Third Ward.
The scheme began to unravel in the third tax season when IRS fraud detection measures revealed suspicious patterns among the fraudulent refund claims and took steps to prevent all but three of the claims submitted that year from being paid.
According to the pleas, Hadley e-filed all of the fraudulent tax returns and personally originated identity information for approximately half of the refund claims. His conspirators provided him with the remaining identities. Price provided Hadley with identities that generated fraudulent refund claims totaling almost $250,000 resulting in actual losses to the IRS of almost $130,000. Garrison provided identities that generated fraudulent refund claims totaling almost $95,000, while Clay provided identities that generated fraudulent refund claims totaling almost $40,000. The resulting in actual losses to the IRS for which Garrison and Clay responsible amounts to approximately $30,000 and $25,000, respectively.
All were permitted to remain on bond.
IRS-CI investigated. Assistant U.S. Attorney Jimmy Sledge Jr. is prosecuting the case.
LRGP Member Pleads Guilty to Rico Conspiracy Involving Murder and Drug ConspiracyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Fred Keys 53 of Buffalo, NY, pleaded guilty before U.S. District Judge Richard J. Arcara to RICO conspiracy and also pleaded guilty to conspiracy to possess with intent to distribute and distribute 28 grams or more of crack cocaine. Keys faces a mandatory minimum penalty of 10 years in prison, a maximum of life and a $10,250,000 in fines.
Assistant U.S. Attorneys Thomas S. Duszkiewicz and Joel L. Violanti, who are handling the case, stated that between 2009 and January 23, 2012, Keys was an associate of the LRGP gang which operates primarily in the area of Lombard, Rother, Gibson and Playter Streets in the City of Buffalo. It is alleged to be an organization engaged in violent criminal activity, including the distribution of cocaine and crack cocaine and the use of firearms.
In April 2011, the defendant and others, while at 318 Sobieski Street in Buffalo, agreed that a member of the Cold Springs Gang, a rival criminal organization, should be murdered in retaliation for the killing Alonzo Scott, in March 2011. Scott was the brother of LRGP leader Dewayne Gray. The individuals settled upon killing Amir Chambers, whom they believed to be associated with the Cold Springs Gang, and who had an ongoing social relationship with Alexis Mills.
After a failed attempt by Mills to poison Amir Chambers, it was agreed that Keys would kill Chambers by shooting him. Mills was to use her relationship with Chambers to get the victim to open his residence door. On April 20, 2011, Keys, Mills, Timothy Finch and Philip Brown went to a residence at 111 Mills Street in Buffalo where they dropped off Fred Keys and Alexis Mills. Chambers opened the residence door upon seeing Alexis Mills at which time Keys today admitted that he killed Chambers by shooting him in the head. Mills, for her part, kicked the victim in the head following the shooting to ensure that Chambers was in fact deceased. Keys later called 911 to report that there was a “body” at 111 Mills Street.
Alexis Mills, Dewayne Gray, Timothy Finch and 13 other LRGP members were convicted previously and are awaiting sentencing. Philip Brown is scheduled to go to trial on June 14, 2016. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The pleas are the result of an investigation by the Federal Bureau of Investigation Safe Streets Task Force, under the direction of Special Agent in Charge Adam S. Cohen, the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Office and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
Fred Keys will be sentenced on September 8, 2016 at 1:00 p.m. before Judge Arcara.
Kingston Man Sentenced to 121 Months for Attempting to Entice a ChildRead the Press Release
ALBANY, NEW YORK – Daniel Jurow, age 37, of Kingston, New York, was sentenced today to serve 121 months in prison after being convicted of using the internet to try to entice a child to meet him for sex.
The announcement was made by United States Attorney Richard S. Hartunian and James C. Spero, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI).
United States District Judge Mae A. D’Agostino also imposed a lifetime term of supervised release, to begin after Jurow’s release from prison. Jurow’s conviction will also require him to register as a sex offender.
As a part of his guilty plea, Jurow admitted that on March 12, 2015, he travelled to Colonie, New York, where he had arranged to meet and have sex with a person he believed to be a 12-year-old girl. Instead, Jurow was arrested by law enforcement.
This case was investigated by HSI and the New York State Police, and was prosecuted by Assistant U.S. Attorneys Solomon B. Shinerock and Elizabeth R. Rabe. The case was investigated as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Key Player in ‘Silk Road 2.0’ Sentenced to Eight Years in PrisonRead the Press Release
A former Bellevue, Washington resident who assisted in the management of the Silk Road 2.0 website was sentenced today in U.S. District Court in Seattle to eight years in prison and four years of supervised release for Conspiracy to Distribute Controlled Substances, announced United States Attorney Annette L. Hayes. BRIAN RICHARD FARRELL, 27, who used the moniker “DoctorClu” on the Silk Road site, came to the attention of Homeland Security Investigations agents in July 2014. Silk Road 2.0 was a hidden website designed to enable its users to buy and sell illegal drugs and other unlawful goods and services anonymously and beyond the reach of law enforcement. At the sentencing hearing U.S. District Judge Richard A. Jones emphasized that a strong deterrent message needs to be sent to people who sell illegal contraband on the dark web because such sites allow people to “hide in the cover of darkness in their houses.”
“The dark web is not the safe haven some think,” said U.S. Attorney Annette L. Hayes. “This sentence should send a clear message to those who peddle illegal drugs via the dark web: you will be caught, prosecuted and face serious penalties.”
According to records filed in the case, Silk Road 2.0 went online in November 2013 following the government’s seizure of the first Silk Road website and the arrest of its alleged owner and operator, Ross William Ulbricht, a/k/a “Dread Pirate Roberts.” In November 2014, Blake Benthall, a/k/a “Defcon,” the operator of the Silk Road 2.0 site, was arrested in San Francisco. FARRELL was a key assistant to Benthall in running the site.
“Silk Road 2.0” was one of the most extensive, sophisticated, and widely used criminal marketplaces on the Internet. The website operated on the “Tor” network, a network of computers on the Internet, located around the world, designed to ‘anonymize’ or conceal the true IP addresses of computers that used the network and thereby the identities of the network’s users. Since its launch in November 2013, Silk Road 2.0 was used by thousands of drug dealers and other vendors to distribute hundreds of kilograms of illegal drugs and other illicit goods and services to buyers throughout the world, as well as to launder millions of dollars generated by these unlawful transactions. As of September 2014, Silk Road 2.0 was generating sales of approximately $8 million per month and had approximately 150,000 active users.
FARRELL was one of the small staff of online administrators and forum moderators who assisted Blake Benthall with the day-to-day operation of the website. Benthall and this small staff controlled and oversaw all aspects of Silk Road 2.0, including, among other things: the computer infrastructure and programming code underlying the website; the terms of service and commission rates imposed on vendors and customers of the website; and the massive profits generated from the operation of the illegal business. FARRELL, operating under the moniker “DoctorClu,” was involved in activities such as approving new staff and vendors for the website, and organizing a denial of service attack on a competitor. When a search warrant was served at FARRELL’s Bellevue home, agents seized $35,000 in cash as well as silver bullion and various types of drug paraphernalia.
“As one of the key masterminds and coordinator of the Silk Road criminal marketplace, Farrell profited from the destruction of untold lives,” said Brad Bench, Special Agent in Charge of HSI Seattle. “Criminals who operate digital black markets and those who trade their illicit goods on them quite mistakenly believe they are above the law. It is one of HSI’s top priorities to shut down these hidden websites and bring their criminal operators and customers to justice.”
The case was investigated by Seattle-Tacoma Border Enforcement Security Task Force (BEST Seattle), U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the United States Postal Inspection Service (USPIS), and the FBI.
The case is being prosecuted by Assistant United States Attorney Thomas Woods.
BEST Seattle is comprised of members from HSI; U.S. Customs and Border Protection's Office of Field Operations; the U.S. Secret Service; the U.S. Coast Guard Investigative Service; the USPIS; and the Seattle and Port of Seattle police department. BEST Seattle investigates smuggling and related crimes and combats criminal organizations seeking to exploit vulnerabilities at the Seattle and Tacoma seaports and adjacent waterways.
Justice Department Issues Draft Guidance Regarding Expert Testimony and Lab Reports in Forensic ScienceRead the Press Release
The Justice Department announced today the release of draft guidance documents governing the testimony and reports of the department’s forensic experts. These documents, available for public comment through July 8, are designed to ensure that department forensic experts only make statements in the courtroom and in laboratory reports that are supported by sound science.
The drafting of these proposed documents arose out of the department’s ongoing, multi-year effort to strengthen the practice of forensic science. Once finalized and adopted, these documents, known as the Uniform Language for Testimony and Reports, will apply to all department personnel who issue forensic reports or provide expert forensic testimony, including forensic experts at the FBI, Drug Enforcement Administration (DEA) and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
“Forensic science is a critical component of our criminal justice system, both for identifying the perpetrator of a crime and for clearing the innocent,” said Deputy Attorney General Sally Q. Yates. “Once finalized and adopted, these guidance documents will clarify what scientific statements our forensic experts may – and may not – use when testifying in court and in drafting reports, in turn strengthening the integrity of our system overall.”
The proposed uniform language documents released today cover seven forensic science disciplines: body fluid testing (serology), drug and chemical analysis (general chemistry), fibers, foot prints/tire treads, glass, latent fingerprints and toxicology. This summer, the department will release a second round of proposed documents for public comment, which will include draft guidance relating to DNA, explosive devices, hair analysis and handwriting. The department expects to adopt final versions of these documents later this year.
Once finalized and adopted, the uniform language documents will only apply to department personnel, but the department decided to release the proposed documents for public comment in an effort to promote transparency and to solicit feedback from the broader forensic science community. As today’s proposed documents make clear, the uniform language documents are not intended to serve as precedent for other forensic laboratories and do not imply that statements by other laboratories are incorrect, indefensible or erroneous.
Copies of the proposed uniform language documents are available for review at https://justice.gov/forensics. Public comments may be submitted through www.regulations.gov.
Jury Trial Results in Conviction of Three Minnesotans for Conspiring to Join ISIL and Commit Murder in SyriaRead the Press Release
GULED ALI OMAR, ABDURAHMEN YASIN DAUD, and MOHAMED ABDIHAMID FARAH were convicted by a federal jury today of conspiring to commit murder in Syria on behalf of the Islamic State of Iraq and the Levant (ISIL) and to provide material support to the designated foreign terrorist organization.
The convictions were announced by U.S. Attorney Andrew M. Luger, Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Division, and Assistant Attorney General for National Security John P. Carlin.
“The evidence in this case made clear that the defendants made a deeply personal and deliberate decision back in 2014,” said United States Attorney Andrew Luger. “They wanted to fight for a brutal terrorist organization, kill innocent people and destroy their own families in the process. This trial should serve as a wake-up call that it will take the entire community to stop terror recruiting in Minnesota.”
“These verdicts affirm the FBI's investigative efforts,” said Special Agent in Charge Richard T. Thornton. “The FBI will not induce people to break our laws. However, the FBI, through all legal means at its disposal, will investigate and pursue those who aim to bring about harm to others.”
“In the first multi-defendant ISIL-related trial, Mohamed Farah, Abdirahman Daud and Guled Omar were convicted of conspiring to provide material support to the foreign terrorist organization and other federal offenses,” said Assistant Attorney General Carlin. “The defendants conspired with a larger group of individuals to travel to Syria to fight on behalf of ISIL. Countering terrorist threats remains the highest priority of the National Security Division. We will continue to work to disrupt the recruitment and radicalization of Americans by terrorist organizations, and bring to justice those who conspire to provide material support to terrorists. I would like to thank the many agents, analysts and prosecutors who worked tirelessly to secure this conviction.”
Between May 2014 and their arrests on April 19, 2015, these three defendants and their co-conspirators made multiple attempts to join the Islamic State of Iraq and the Levant (ISIL) in Syria.In May 2014, some members of the conspiracy, including defendant GULED OMAR and co-conspirators ABDI NUR, ABDULLAHI YUSUF, traveled or attempted to travel to Syria to join ISIL. To facilitate the travel of his co-conspirators, defendant DAUD provided contact information for an ISIL member in Turkey to NUR and YUSUF so they could gain assistance crossing the border from Turkey into Syria. NUR succeeded in his plan, joining ISIL in Syria in June 2014. YUSUF was stopped at the Minneapolis/ St. Paul Airport and was later arrested.
Also in May 2014, defendant OMAR and two other members of the conspiracy made an attempt to join ISIL by traveling across the United States – Mexico border near San Diego. This planned failed when members of defendant OMAR’s family prevented his travel.
In October 2014, members of conspiracy communicated with “Antar,” a self-described member of ISIL in Syria, about how best to travel to Syria to join ISIL. Members of conspiracy met with one another to discuss routes, methods and the timing of leaving the United States to join ISIL in Syria.
Defendant OMAR again attempted to join ISIL in Syria on November 6, 2014, by first flying from Minneapolis/St. Paul International Airport to San Diego, California. Again, defendant OMAR planned to cross the United States – Mexico border near San Diego and travel onward to Syria to join ISIL. Before he could board the flight in Minnesota, OMAR was stopped at the airport and prevented from boarding the plane. In order to fund this second attempt to join ISIL in Syria, OMAR intended to use federal financial aid provided to him by the United States Department of Education to attend college.
Also in November 2014, defendant FARAH and three of his co-conspirators, defendants ZACHARIA ABDURAHMAN, HANAD MUSSE, and HAMZA AHMED, took a Greyhound bus to New York City and attempted to board flights to Europe. Defendant FARAH’s ultimate destination was Syria, where he planned to join and fight with ISIL. Federal agents in New York prevented defendant FARAH and his three co-conspirators from traveling.
In April 2015, defendants DAUD and FARAH drove from Minneapolis to San Diego, Calif., where they intended to purchase fake passports, cross the border into Mexico, travel to Syria to join ISIL. Unbeknownst to them, the individual from whom they purchased the fake passports was a law enforcement officer and both were arrested by federal agents immediately after obtaining the phony travel documents.
Ten Minnesotans were charged as part of this conspiracy to provide material support to ISIL. The men are all associates and friends of one another. Six defendants pleaded guilty before trial and one, ABDI NUR, joined ISIL in Syria in June 2015.
This case is the result of an investigation conducted by the FBI-led Joint Terrorism Task Force.
The case is being prosecuted by Assistant United States Attorneys Andrew Winter, John Docherty, and Julie Allyn, with assistance provided by the National Security Division’s Counterterrorism Section
Special thanks to San Diego and New York Field Offices of the FBI and the United States Attorney’s Office in the Southern District of California.
Defendant Information:
GULED ALI OMAR, 21
Minneapolis, Minn.Convicted: • Conspiracy to Murder Outside the United States, 1 count
• Conspiracy to Provide Material Support to a Designated Foreign Terrorist Organization (the Islamic State of Iraq and the Levant), 1 count
• Attempting to Provide Material Support to a Designated Foreign Terrorist Organization, 2 counts
• Attempted Financial Aid Fraud, 1 countMOHAMED ABDIHAMID FARAH, 22
Minneapolis, Minn.Convicted: • Conspiracy to Murder Outside the United States, 1 count
• Conspiracy to Provide Material Support to a Designated Foreign Terrorist Organization (the Islamic State of Iraq and the Levant), 1 count
• Attempting to Provide Material Support to a Designated Foreign Terrorist Organization, 2 counts
• Perjury, 1 count
• False Statement, 1 countABDIRAHMAN YASIN DAUD, 22
Minneapolis, Minn.Convicted: • Conspiracy to Murder Outside the United States, 1 count
• Conspiracy to Provide Material Support to a Designated Foreign Terrorist Organization (the Islamic State of Iraq and the Levant), 1 count
• Attempting to Provide Material Support to a Designated Foreign Terrorist Organization, 1 countJury Trial Results in Conviction of Three Minnesotans for Conspiring to Join ISIL and Commit Murder in SyriaRead the Press Release
GULED ALI OMAR, ABDURAHMEN YASIN DAUD, and MOHAMED ABDIHAMID FARAH were convicted by a federal jury today of conspiring to commit murder in Syria on behalf of the Islamic State of Iraq and the Levant (ISIL) and to provide material support to the designated foreign terrorist organization.
The convictions were announced by U.S. Attorney Andrew M. Luger, Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Division, and Assistant Attorney General for National Security John P. Carlin.
“The evidence in this case made clear that the defendants made a deeply personal and deliberate decision back in 2014,” said United States Attorney Andrew Luger. “They wanted to fight for a brutal terrorist organization, kill innocent people and destroy their own families in the process. This trial should serve as a wake-up call that it will take the entire community to stop terror recruiting in Minnesota.”
“These verdicts affirm the FBI's investigative efforts,” said Special Agent in Charge Richard T. Thornton. “The FBI will not induce people to break our laws. However, the FBI, through all legal means at its disposal, will investigate and pursue those who aim to bring about harm to others.”
“In the first multi-defendant ISIL-related trial, Mohamed Farah, Abdirahman Daud and Guled Omar were convicted of conspiring to provide material support to the foreign terrorist organization and other federal offenses,” said Assistant Attorney General Carlin. “The defendants conspired with a larger group of individuals to travel to Syria to fight on behalf of ISIL. Countering terrorist threats remains the highest priority of the National Security Division. We will continue to work to disrupt the recruitment and radicalization of Americans by terrorist organizations, and bring to justice those who conspire to provide material support to terrorists. I would like to thank the many agents, analysts and prosecutors who worked tirelessly to secure this conviction.”
Between May 2014 and their arrests on April 19, 2015, these three defendants and their co-conspirators made multiple attempts to join the Islamic State of Iraq and the Levant (ISIL) in Syria.
In May 2014, some members of the conspiracy, including defendant GULED OMAR and co-conspirators ABDI NUR, ABDULLAHI YUSUF, traveled or attempted to travel to Syria to join ISIL. To facilitate the travel of his co-conspirators, defendant DAUD provided contact information for an ISIL member in Turkey to NUR and YUSUF so they could gain assistance crossing the border from Turkey into Syria. NUR succeeded in his plan, joining ISIL in Syria in June 2014. YUSUF was stopped at the Minneapolis/ St. Paul Airport and was later arrested.
Also in May 2014, defendant OMAR and two other members of the conspiracy made an attempt to join ISIL by traveling across the United States – Mexico border near San Diego. This planned failed when members of defendant OMAR’s family prevented his travel.
In October 2014, members of conspiracy communicated with “Antar,” a self-described member of ISIL in Syria, about how best to travel to Syria to join ISIL. Members of conspiracy met with one another to discuss routes, methods and the timing of leaving the United States to join ISIL in Syria.
Defendant OMAR again attempted to join ISIL in Syria on November 6, 2014, by first flying from Minneapolis/St. Paul International Airport to San Diego, California. Again, defendant OMAR planned to cross the United States – Mexico border near San Diego and travel onward to Syria to join ISIL. Before he could board the flight in Minnesota, OMAR was stopped at the airport and prevented from boarding the plane. In order to fund this second attempt to join ISIL in Syria, OMAR intended to use federal financial aid provided to him by the United States Department of Education to attend college.
Also in November 2014, defendant FARAH and three of his co-conspirators, defendants ZACHARIA ABDURAHMAN, HANAD MUSSE, and HAMZA AHMED, took a Greyhound bus to New York City and attempted to board flights to Europe. Defendant FARAH’s ultimate destination was Syria, where he planned to join and fight with ISIL. Federal agents in New York prevented defendant FARAH and his three co-conspirators from traveling.
In April 2015, defendants DAUD and FARAH drove from Minneapolis to San Diego, Calif., where they intended to purchase fake passports, cross the border into Mexico, travel to Syria to join ISIL. Unbeknownst to them, the individual from whom they purchased the fake passports was a law enforcement officer and both were arrested by federal agents immediately after obtaining the phony travel documents.
Ten Minnesotans were charged as part of this conspiracy to provide material support to ISIL. The men are all associates and friends of one another. Six defendants pleaded guilty before trial and one, ABDI NUR, joined ISIL in Syria in June 2015.
This case is the result of an investigation conducted by the FBI-led Joint Terrorism Task Force.
The case is being prosecuted by Assistant United States Attorneys Andrew Winter, John Docherty, and Julie Allyn, with assistance provided by the National Security Division’s Counterterrorism Section.
Special thanks to San Diego and New York Field Offices of the FBI and the United States Attorney’s Office in the Southern District of California.
Defendant Information:
GULED ALI OMAR, 21
Minneapolis, Minn.
Convicted:
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Conspiracy to Murder Outside the United States, 1 count
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Conspiracy to Provide Material Support to a Designated Foreign Terrorist Organization (the Islamic State of Iraq and the Levant), 1 count
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Attempting to Provide Material Support to a Designated Foreign Terrorist Organization, 2 counts
- Attempted Financial Aid Fraud, 1 count
MOHAMED ABDIHAMID FARAH, 22
Minneapolis, Minn.
Convicted:
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Conspiracy to Murder Outside the United States, 1 count
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Conspiracy to Provide Material Support to a Designated Foreign Terrorist Organization (the Islamic State of Iraq and the Levant), 1 count
-
Attempting to Provide Material Support to a Designated Foreign Terrorist Organization, 2 counts
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Perjury, 1 count
- False Statement, 1 count
ABDIRAHMAN YASIN DAUD, 22
Minneapolis, Minn.
Convicted:
-
Conspiracy to Murder Outside the United States, 1 count
-
Conspiracy to Provide Material Support to a Designated Foreign Terrorist Organization (the Islamic State of Iraq and the Levant), 1 count
-
Attempting to Provide Material Support to a Designated Foreign Terrorist Organization, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
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Jury Convicts Brandon Scott Woodley in Federal Court of Being A Convicted Felon in Possession of AmmunitionRead the Press Release
KNOXVILLE, Tenn. – On June 2, 2016, after a two-day trial in U.S District Court, a federal jury convicted Brandon Scott Woodley, 34, of Knoxville, Tenn., of knowingly possessing ammunition after having previously been convicted of a felony. Woodley has been in custody since his arrest in September 2015, following an August 2015 shooting in a west Knoxville hotel parking lot. Witnesses testified at trial that Woodley shot a co-worker during an argument and fled the scene with the gun; however, some ammunition from the shooting was recovered in the parking lot.
In 2009 Woodley pleaded guilty in the same court of being a convicted felon in possession of a cache of firearms.
Sentencing was set for Oct. 3, 2016, before the Honorable R. Leon Jordan, Senior U.S District Court Judge. Woodley faces a maximum sentence of 10 years in prison, plus another two years in prison for violating the supervised release he was serving following his prison sentence for the 2009 conviction.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Knoxville Police Department. Assistant U.S. Attorney Matthew Morris represented the United States.
This case was brought as part of Project Safe Neighborhoods (“PSN”), a comprehensive national strategy that creates local partnerships with law enforcement agencies to effectively enforce existing gun laws. It provides more options to prosecutors, allowing them to utilize local, state, and federal laws to ensure that criminals who commit gun crime face tough sentences. PSN gives each federal district the flexibility it needs to focus on individual challenges that a specific community faces.
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Investment Adviser Charged in Manhattan Federal Court with Insider TradingRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the arrest of DAVID HOBSON, who served as an investment adviser in the Providence, Rhode Island, offices of two different national broker-dealer and investment advisers (“Brokerage Firm-1” and “Brokerage Firm-2”), for engaging in a scheme to commit insider trading in connection with deals involving a pharmaceutical company (the “Pharma Company”) at which MICHAEL MACIOCIO, HOBSON’s friend and client, worked. In addition, Mr. Bharara announced the unsealing of charges against MACIOCIO, who pled guilty and admitted to his participation in the scheme in May. MACIOCIO, who had been employed by the Pharma Company, regularly possessed material, nonpublic information (“Inside Information”) concerning pending acquisitions and transactions under consideration by the Pharma Company. From at least 2008 through April 2014, MACIOCIO breached his duty of confidentiality to the Pharma Company by providing Inside Information about potential acquisitions and transactions to his friend and long-time broker, HOBSON. HOBSON, in turn, used the Inside Information to execute profitable securities trades for himself, for MACIOCIO, and for other clients of HOBSON’s.
HOBSON was arrested this morning in Providence, Rhode Island, and was presented today before a magistrate judge in Providence. The case against HOBSON and MACIOCIO is before United States District Judge Laura Taylor Swain. On Friday, May 20, 2016, MACIOCIO pled guilty before United States Magistrate Judge Barbara Moses to an Information charging him with conspiracy to commit securities fraud, conspiracy to commit wire fraud, and securities fraud.
In a separate action, the Securities and Exchange Commission (“SEC”) filed civil charges against HOBSON and MACIOCIO.
U.S. Attorney Preet Bharara said: “As alleged, Michael Maciocio abused his position at a major pharmaceutical company to feed insider information to his friend and broker, David Hobson, who allegedly helped both benefit from trades based on that illegal edge. Unfortunately, illegal insider trading remains a blight on our securities markets and we will continue to work with the FBI to investigate and prosecute it.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “Having material, nonpublic information on public companies is a trusted privilege that should be used to carry out business matters, not used as advantage on which to trade and profit. As alleged, Michael Maciocio used his position at a pharmaceutical company to share nonpublic information with his friend and long-time broker, David Hobson. Hobson allegedly used traded on the information, for both Maciocio and other clients, profiting all parties $370,000. Keeping our markets fair for all investors remains a top priority for the FBI and we will continue to work with our law enforcement partners to bring charges against those who use illegal and unfair advantages in our securities markets.”
According to the allegations in the charging documents unsealed today in Manhattan federal court, including the Information and Indictment[1], and statements made in court proceedings:
From in or about May 2008 through in or about April 2014, MACIOCIO and HOBSON participated in a scheme to commit insider trading in advance of and in connection with acquisitions and transactions under consideration by the Pharma Company. MACIOCIO and HOBSON were childhood friends and HOBSON had served as MACIOCIO’s investment adviser and broker for many years.
MACIOCIO learned about the impending transactions through his role as a Master Planner in the Active Pharmaceutical Ingredient Supply Chain Group at the Pharma Company. In that role, MACIOCIO was tasked with evaluating manufacturing demands and capacity within the Pharma Company and was consulted about potential acquisitions to assist in determining whether the Pharma Company would be able to manufacture any new product in-house. Although MACIOCIO was not typically provided with the name of the target acquisition, he used the Inside Information he received – including the Pharma Company’s code name of the acquisition, the drug indication, the dosage, the phase of any clinical trial, and the chemical structure of the drug – to uncover the true identity of the target company. He was at times aided in this task by HOBSON.
Having learned the Inside Information about these impending transactions, MACIOCIO, in breach of fiduciary duties and other duties of trust and confidence owed to the Pharma Company, traded on his own behalf and tipped HOBSON so that HOBSON could use the information to trade for both himself and for MACIOCIO. HOBSON also used the Inside Information to trade in other of his clients’ accounts, first at Brokerage Firm-1 and later at Brokerage Firm-2.
HOBSON used the Inside Information that he received from MACIOCIO to make profitable trades in, among other securities: Medivation, Inc., Ardea Biosciences, Inc., and Furiex Pharmaceuticals, Inc. As a result of the scheme, HOBSON reaped approximately $180,000 in ill-gotten gains for himself, $40,000 for MACIOCIO, and nearly $150,000 for certain of HOBSON’s other clients.
* * *
HOBSON, 47, is charged with one count of conspiracy to commit securities fraud, one count of conspiracy to commit wire fraud, and two counts of securities fraud. Count One carries a maximum sentence of five years in prison. Counts Two through Four each carry a maximum sentence of 20 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
On May 20, 2016, MACIOCIO, 46, pled guilty before Judge Moses to one count of conspiracy to commit securities fraud, one count of conspiracy to commit wire fraud, and two counts of securities fraud. Count One carries a maximum sentence of five years in prison. Counts Two through Four each carry a maximum sentence of 20 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentences for the defendants will be determined by the judge.
Mr. Bharara praised the work of the FBI, and thanked the SEC.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Aimee Hector and Rebecca Mermelstein are in charge of the prosecution.
The allegations contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the descriptions of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
Heroin Trafficker Sentenced to 5 Years in PrisonRead the Press Release
PROVIDENCE, R.I. – Wilkins Robles-Tejada, 29, of Providence, was sentenced today to 60 months in federal prison for trafficking heroin. Tejada was arrested by Providence and Cranston Police in February 2015.
At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Tejada to serve 5 years supervised release upon completion of his prison term. Tejada pleaded guilty on February 8, 2016, to one count of possession with the intent to distribute 100 grams or more of heroin.
Tejada’s sentence is announced by United States Attorney Peter F. Neronha, Providence Police Chief Colonel Hugh T. Clements, Jr., and Cranston Police Chief Colonel Michael J. Winquist.
According to court documents, in February 2015, Providence Police detectives initiated an investigation into Tejada’s drug dealing activities in and around the City of Providence. On at least two occasions, an individual assisting Providence Police made purchases of heroin from Tejada while subject to police surveillance. During the course of the investigation, Tejada was seen by law enforcement visiting a Cranston residence on numerous occasions.
On February 20, 2015, members of the Providence Police Narcotics Unit and Cranston Police Special Investigations Unit executed a court authorized search warrant at the Cranston residence Tejada repeatedly visited. From inside a locked basement room law enforcement determined Tejada was using for his drug trafficking activities, law enforcement seized approximately 981 grams of heroin, 95 grams of cocaine, 19 grams of fentanyl, and a firearm.
Tejada has been detained since his arrest on February 20, 2015.
The case was prosecuted by Assistant U.S. Attorney Gerard B. Sullivan.
Members of the Rhode Island DEA Drug Task Force assisted Providence Police and Cranston Police in the investigation of this matter.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Fourth Individual Charged in Ongoing New York Power Authority Procurement Fraud InvestigationRead the Press Release
The Department of Justice, the Internal Revenue Service (IRS) and the New York State Inspector General, which are all conducting a joint federal and state investigation into bid-rigging, fraud and tax-related offenses in the award of contracts at the New York Power Authority (NYPA), announced today that a Westchester County, New York, resident pleaded guilty today to aiding and assisting in the filing of a false tax return.
According to the one-count felony charge filed in the U.S. District Court for the Southern District of New York, in White Plains, New York, John Simonlacaj caused another individual to file a Form 1040 for the tax year 2010 that substantially understated that individual’s taxable income. Simonlacaj pleaded guilty to aiding and assisting in the filing of a false tax return, which carries a maximum penalty of three years in prison and a $250,000 fine.
“Our investigation into bid rigging and fraud by companies supplying the New York Power Authority has uncovered a variety of criminal activity,” said Principal Deputy Assistant Attorney General Renata Hesse, head of the Justice Department’s Antitrust Division. “Filing a false tax return is a serious offense and we are pleased to have worked with our partners in law enforcement to prosecute the criminal violation.”
“We say many times the FBI won’t stop until we find everyone responsible for their roles in a criminal investigation,” said Assistant Director in Charge Diego Rodriguez of the FBI’s New York Field Office. “These charges prove our tenacity in digging until we hit the bottom of the pile and uncover anyone who had a part in criminal wrongdoing.”
"Today’s plea marks yet another defendant admitting guilt following a bid rigging investigation that began at the state level. My office and those of my federal law enforcement partners, will continue to follow the evidence wherever it may lead," said New York State Inspector General Catherine Leahy Scott.
“Mr. Simonlacaj is now held accountable for his role in filing a false tax return,” said Special Agent in Charge Shantelle P. Kitchen of the IRS Criminal Investigation New York Field Office. “Towards pursuing its goal of ensuring that that everyone pays their fair share of taxes, IRS Criminal Investigation remains committed to this ongoing investigation.”
The investigation is being conducted by the Antitrust Division’s New York Office with the assistance of the FBI, IRS Criminal Investigation and the New York State Office of the Inspector General. NYPA is cooperating with the investigation. Anyone with information on bid rigging or other anticompetitive conducted related to the award or performance of municipal and state contracts should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258 or visit http://www.justice.gov/atr/contact/newcase.html.
Fourth Guilty Plea in Drug Conspiracy RingRead the Press Release
BOISE – Stacy Duane Wilfong, 39, of Boise, Idaho, pleaded guilty yesterday to conspiracy to distribute a controlled substance, U.S. Attorney Wendy J. Olson announced. Wilfong was indicted by a federal grand jury on December 8, 2015.
In approximately January 2015, law enforcement agents began investigating ongoing drug distribution by Stacy Wilfong and others. Wilfong and his other coconspirators acted together to distribute methamphetamine, heroin, bath salts, and pills including oxycodone and hydromorphone in the Treasure Valley. Wilfong was arrested on August 25, 2015 in Jackpot, Nevada. Law enforcement agents found approximately one ounce of methamphetamine in co-defendant Jocelin Gonzalez’s backpack. Agents searched Wilfong’s vehicle and located nineteen grams of a synthetic controlled substance called Alpha-pyrrolidinopentiophenone, known as "a-PVP," or “bath salts.” During the search of the vehicle agents located three firearms and approximately $10,000.
Eleven people were indicted on conspiracy to distribute drugs as part of the investigation of Wilfong. He was the fourth person to plead guilty. Jocelin Jessica Gonzalez, 19, and Elizabeth Ann Gaytan, 37, both from Nampa, Idaho, pleaded guilty on May 5, 2016, and will be sentenced on July 28, 2016. Regina Wade, 50, of Boise pleaded guilty on May 19, 2016. Six co-defendants are currently set for trial: David Anthony Wales, 31, of Boise; John Matthew Caviness, Jr., 34, of Caldwell; Breeannyn Nicole Pederson, 25, of Parma; Adam William Dillon, 28, of Nampa; Isela F. Garza, 36, of Nampa; and Jason Lee Burgess, 44, of Garden City. Anthony James Kitchen, 47, of Nampa, has given notice of his intent to plead guilty and is set for a plea change on June 30, 2016, in U.S. District Court.
The crime of conspiracy to distribute a controlled substance is punishable by up to twenty years in prison, a maximum fine of $1,000,000 and three years of supervised release. Sentencing is set for August 16, 2016, before U.S. District Judge Edward J. Lodge at the federal courthouse in Boise.
These cases are the result of a joint investigation by the Treasure Valley Metro Violent Crime Task Force and the Organized Crime and Drug Enforcement Task Force (OCDETF). The Treasure Valley Metro Violent Crime Task Force is comprised of federal, state and local agencies, including the Federal Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; Boise Police Department; Ada County Sheriff’s Office; Caldwell Police Department; Nampa Police Department; Meridian Police Department; Canyon County Sheriff’s Office; and Idaho Department of Probation and Parole. The Organized Crime and Drug Enforcement Task Force (OCDETF), includes the cooperative law enforcement efforts of the Federal Bureau of Investigation; Drug Enforcement Administration; Bureau of Alcohol, Tobacco, Firearms and Explosives; U. S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Internal Revenue Service-Criminal Investigation; and U.S. Marshals Service. The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
These cases are being prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership and the State of Idaho to address gang crimes. The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth. For more information, visit treasurevalleypartners.org.
Four Youngstown men indicted for trafficking crack cocaine; indictment also alleges firearms violationsRead the Press Release
A federal grand jury returned a 15-count indictment charging four Youngstown men with narcotics and firearms violations, said Carole S. Rendon, Acting U.S. Attorney for the Northern District of Ohio.
Tawayme Jett, 36; Jamal Pusey, 37; Michael Reynolds, 33, and Olajuwon Perkins, 26, were charged with conspiracy to distribute and distribution of crack cocaine. Jett and Pusey are also charged with being felons in possession of firearms and ammunition.
Pusey maintained two residences in Youngstown for the purposes of selling narcotics. Pusey, Reynolds, Perkins and Jett then used these two residences to store and sell crack cocaine and store firearms, according to the indictment.
Pusey and Jett possessed firearms to protect themselves and their drug proceeds, according to the indictment.
The defendants, between March and June 2015, sold crack cocaine to confidential sources, possessed firearms, ammunition, crack cocaine, digital scales and drug proceeds, according to the indictment.
Pusey and Jett are also charged with being convicted felons who possessed multiple firearms on June 23, 2015.
If convicted, the defendants’ sentences will be determined by the court after review of factors unique to this case, including each of the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Mahoning Valley Law Enforcement Task Force and the U.S. Marshals Fugitive Task Force. The matter is being prosecuted by Assistant United States Attorney David M. Toepfer.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Four Charged with Defrauding more than $900,000 from Clifton-Based Trucking CompanyRead the Press Release
NEWARK, N.J. – Four people have been arrested and charged with stealing more than $900,000 from a New Jersey-based trucking company, U.S. Attorney Paul J. Fishman announced today.
Lisa Popewiny, 53, of Clifton, New Jersey, and brothers Angel D. Vidal, 24, and Angel Gabriel Vidal, 22, of Paterson, New Jersey, and Miguel Vidal, 22, of Jersey City, New Jersey, are each charged by complaint with one count of wire fraud. Federal authorities arrested Popewiny, Angel D. Vidal and Angel Gabriel Vidal on June 2, 2016. Miguel Vidal was arrested today. All four defendants appeared before U.S. Magistrate Judge Stephen C. Mannion in Newark federal court; Miguel Vidal appeared today and the remaining defendants appeared yesterday.
According to the complaint:
Popewiny was the payroll clerk at Clifford B. Finkle Jr. Inc, a Clifton company that provided transportation and freight services to various public and private entities located in New Jersey, New York, and elsewhere. From June 2012 to April 2015, Popewiny, Angel D. Vidal, Angel Gabriel Vidal, and Miguel Vidal – a former truck driver for the Company – allegedly engaged in a scheme to defraud the company out of $920,380.
Popewiny falsified payroll records in order to generate fraudulent paychecks payable to non-existent employees. Angel D. Vidal, Angel Gabriel Vidal, and Miguel Vidal then converted the paychecks, many of which were deposited into their bank accounts and then funneled out in cash. The scheme came to light when owners of the company, in an effort to investigate suspected fraud, distributed the payroll checks to employees – a task normally completed by Popewiny. After all of the payroll checks had been distributed, six paychecks remained that turned out to be fraudulently issued. Further investigation revealed that Popewiny input false hours for at least 12 different individuals.
The count of wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited criminal investigators in the U.S. Attorney’s Office, postal inspectors from the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Cynthia Shoffner, and members of the U.S. Marshals’ Fugitive Task Force, under the direction of U.S. Marshal Juan Mattos Jr., with the investigation leading to the arrests and charges.
The charge and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorney Cari Fais of the Special Prosecution Division in Newark. finkle_trucking_complaint.pdf
Four Charged with Defrauding More Than $900,000 from Clifton-Based Trucking CompanyRead the Press Release
NEWARK, N.J. – Four people have been arrested and charged with stealing more than $900,000 from a New Jersey-based trucking company, U.S. Attorney Paul J. Fishman announced today.
Lisa Popewiny, 53, of Clifton, New Jersey, and brothers Angel D. Vidal, 24, and Angel Gabriel Vidal, 22, of Paterson, New Jersey, and Miguel Vidal, 22, of Jersey City, New Jersey, are each charged by complaint with one count of wire fraud. Federal authorities arrested Popewiny, Angel D. Vidal and Angel Gabriel Vidal on June 2, 2016. Miguel Vidal was arrested today. All four defendants appeared before U.S. Magistrate Judge Stephen C. Mannion in Newark federal court; Miguel Vidal appeared today and the remaining defendants appeared yesterday.
According to the complaint:
Popewiny was the payroll clerk at Clifford B. Finkle Jr. Inc, a Clifton company that provided transportation and freight services to various public and private entities located in New Jersey, New York, and elsewhere. From June 2012 to April 2015, Popewiny, Angel D. Vidal, Angel Gabriel Vidal, and Miguel Vidal – a former truck driver for the Company – allegedly engaged in a scheme to defraud the company out of $920,380.
Popewiny falsified payroll records in order to generate fraudulent paychecks payable to non-existent employees. Angel D. Vidal, Angel Gabriel Vidal, and Miguel Vidal then converted the paychecks, many of which were deposited into their bank accounts and then funneled out in cash. The scheme came to light when owners of the company, in an effort to investigate suspected fraud, distributed the payroll checks to employees – a task normally completed by Popewiny. After all of the payroll checks had been distributed, six paychecks remained that turned out to be fraudulently issued. Further investigation revealed that Popewiny input false hours for at least 12 different individuals.
The count of wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited criminal investigators in the U.S. Attorney’s Office, postal inspectors from the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Cynthia Shoffner, and members of the U.S. Marshals’ Fugitive Task Force, under the direction of U.S. Marshal Juan Mattos Jr., with the investigation leading to the arrests and charges.
The charge and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorney Cari Fais of the Special Prosecution Division in Newark.
Defense counsel:
Angel D. Vidal: K. Anthony Thomas Esq., Assistant Federal Public Defender, Newark
Former Waterloo Resident Sentenced to Federal PrisonRead the Press Release
James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced today that on June 3, 2016, Nicholas J. Perjak, 35, formerly of Waterloo, IL, was sentenced on a four-count Superseding Indictment charging him, in Count 1, with Attempt to Access with Intent to View Child Pornography; and, in Counts 2 through 4, with Access with Intent to View Child Pornography. Perjak received 60 months in federal prison on all counts, to run concurrently, followed by 10 years of supervised release on each count, also to run concurrently. Perjak was fined $100 on each count, for a total fine of $400, and ordered to pay a $400 special assessment.
The charges arose from an investigation by the Federal Bureau of Investigation’s New Orleans’ Office in which IP addresses were captured when an individual, using a particular IP address, visited a website that contained links to child pornography and subsequently clicked on a link that indicated, through the description of the link, that the link would lead to child pornography. An administrative subpoena issued as part of the investigation determined that one of the captured IP addresses was registered to Perjak at his prior residence in Waterloo. The investigation by the New Orleans’ office revealed that Perjak attempted to access child pornography on this website on May 14, May 18, and June 25, 2011 (Count 1).
Based on this information, Task Force Officers with the FBI’s Child Exploitation Task Force conducted an interview with Perjak on December 13, 2012. Perjak provided a statement in which he identified a Dell laptop computer as the computer he primarily used for work and
personal business. Perjak also admitted viewing child pornography for approximately two years, and indicated that he viewed child pornography "in the last week." Perjak admitted being addicted to child pornography, and said that he had been addicted to it for the past three years. Perjak also admitted viewing child pornography of girls aged between ten and sixteen. Perjak said that he never saved or stored any child pornography on his Dell laptop computer.
A forensic review of the Dell laptop computer revealed approximately 6,164 image files of child pornography. The forensic review also revealed that on November 11, November 24, and December 3, 2012, Perjak searched for and accessed both image and video files of child pornography using Internet Explorer (Counts 2-4).
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
The case was investigated by the FBI’s New Orleans’ Office and the FBI’s Springfield Child Exploitation Task Force. The case was assigned to Assistant United States Attorney Angela Scott.
Former Tampa Resident Indicted for Fraudulent Mortgage Repayment SchemeRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces the return of an indictment charging Leigh Fiske (52) with two counts of bank fraud. If convicted, he faces a maximum penalty of 30 years in federal prison on each count.
According to the indictment, Fiske submitted two fraudulent financial instruments to the servicer and the bank trustee of a mortgage that he had used to finance the purchase of property in Tampa in 2005. The fraudulent instruments and accompanying documentation directed the financial institutions, both of which had received funds from the Treasury Department’s Troubled Asset Relief Program, to apply the face value of the instruments to his outstanding mortgage debt in separate attempts to extinguish that obligation. In truth, neither instrument had or conveyed anything of monetary value. The intended loss of the scheme was over $650,000.
In March 2016, Fiske was indicted in a separate fraud case for a scheme in which he allegedly funneled monies obtained from counterfeit or altered business checks through a trust account that he had created for a shell company he controlled. That case is pending trial.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Bureau of Investigation, and the Office of the Comptroller of the Currency. It will be prosecuted by Assistant United States Attorney Eric K. Gerard.
Former Maryland Resident Pleads Guilty to Conspiracy to Defraud the United StatesRead the Press Release
Greenbelt, Maryland – A South Carolina man pleaded guilty to a criminal information charging conspiracy to defraud the United States for the purpose of obstructing the functions of the Internal Revenue Service (IRS), announced U.S. Attorney Rod J. Rosenstein of the District of Maryland and Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to information presented in court, Menachem Shoham, age 67, of Rockville, Maryland, conspired with several family members and with Martin Lack, a former asset manager at a firm in Zurich, to maintain undeclared offshore bank accounts in order to conceal assets and income from the IRS. Lack pleaded guilty in 2014 to a charge of conspiracy to defraud the United States.
“In today’s plea, Menachem Shoham admitted to conspiring to defraud the IRS through the use of undeclared offshore bank accounts, secretly tapping into the funds through large cash withdrawals abroad and employing credit cards directly linked to the accounts to pay personal expenses,” said Acting Deputy Assistant Attorney General Goldberg. “This case is another step in the department’s ongoing efforts, along with its partners in the IRS, to actively investigate and prosecute the illegal use of offshore bank accounts, not just in Switzerland, but around the world.”
“No matter how you attempt to disguise your income, one is still legally required to pay taxes on it,” said Special Agent in Charge Thomas Jankowski of IRS-Criminal Investigation (CI) Washington, D.C., Field Office. “Today’s plea is a reminder that IRS Criminal Investigation is committed to following the money trail across the globe and will not be deterred by sophisticated financial transactions.”
As part of the conspiracy, Shoham and his family members traveled both within the United States and to the Bahamas, the United Kingdom and Switzerland in order to meet with Lack and obtain at least $379,930 in cash withdrawals from their offshore accounts. The co-conspirators further obtained credit cards linked to their offshore accounts as an additional means of accessing the funds while at the same time concealing them from the IRS. Shoham and his family members also provided false information to their tax return preparers in order to conceal the ownership and control of the offshore accounts.
For the years 2005 to 2010, Shoham filed false U.S. individual income tax returns with the IRS on which he failed to report his offshore bank accounts. For the years 1999 to 2010, Shoham was required to file annual Reports of Foreign Bank and Financial Accounts (FBARs) with the IRS; however, despite maintaining account balances which at times exceeded $500,000, Shoham failed to file the required FBARs. As a result of the conspiracy, Shoham caused a tax loss to the United States of $36,287.
At his August 15 sentencing, Shoham faces a statutory maximum sentence of five years in prison. He also faces monetary penalties and restitution.
U.S. Attorney Rosenstein and Acting Deputy Assistant Attorney General Goldberg commended the IRS-Criminal Investigation, who investigated the case, and Senior Litigation Counsel Mark F. Daly and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney David Salem of the District of Maryland, who are prosecuting this case.
Former Maryland Resident Pleads Guilty to Conspiracy to Defraud the United StatesRead the Press Release
Used Secret Foreign Accounts to Hide over $500,000 in Funds and Avoid Paying Taxes
A South Carolina man pleaded guilty to a criminal information charging conspiracy to defraud the United States for the purpose of obstructing the functions of the Internal Revenue Service (IRS), announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Rod J. Rosenstein of the District of Maryland.
According to information presented in court, Menachem Shoham, 67, conspired with several family members and with Martin Lack, a former asset manager at a firm in Zurich, to maintain undeclared offshore bank accounts in order to conceal assets and income from the IRS. Lack pleaded guilty in 2014 to a charge of conspiracy to defraud the United States.
“In today’s plea, Menachem Shoham admitted to conspiring to defraud the IRS through the use of undeclared offshore bank accounts, secretly tapping into the funds through large cash withdrawals abroad and employing credit cards directly linked to the accounts to pay personal expenses,” said Acting Deputy Assistant Attorney General Goldberg. “This case is another step in the department’s ongoing efforts, along with its partners in the IRS, to actively investigate and prosecute the illegal use of offshore bank accounts, not just in Switzerland, but around the world.”
“No matter how you attempt to disguise your income, one is still legally required to pay taxes on it,” said Special Agent in Charge Thomas Jankowski of IRS-Criminal Investigation (CI) Washington, D.C., Field Office. “Today’s plea is a reminder that IRS Criminal Investigation is committed to following the money trail across the globe and will not be deterred by sophisticated financial transactions.”
As part of the conspiracy, Shoham and his family members traveled both within the United States and to the Bahamas, the United Kingdom and Switzerland in order to meet with Lack and obtain at least $379,930 in cash withdrawals from their offshore accounts. The co-conspirators further obtained credit cards linked to their offshore accounts as an additional means of accessing the funds while at the same time concealing them from the IRS. Shoham and his family members also provided false information to their tax return preparers in order to conceal the ownership and control of the offshore accounts.
For the years 2005 to 2010, Shoham filed false U.S. Individual Income Tax Returns, Forms 1040, with the IRS, on which he failed to report his offshore bank accounts. For the years 1999 to 2010, Shoham was required to file annual Reports of Foreign Bank and Financial Accounts (FBARs) with the IRS; however, despite maintaining account balances which at times exceeded $500,000, Shoham failed to file the required FBARs. As a result of the conspiracy, Shoham caused a tax loss to the United States of $36,287.
At his Aug. 15 sentencing, Shoham faces a statutory maximum sentence of five years in prison. He also faces monetary penalties and restitution.
Acting Deputy Assistant Attorney General Goldberg and U.S. Attorney Rosenstein commended special agents of IRS-CI, who investigated the case, and Senior Litigation Counsel Mark F. Daly and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney David Salem of the District of Maryland, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Federal Jury Convicts Three Minnesota Men for Conspiring to Join ISIL and Commit Murder in SyriaRead the Press Release
Nine Members of the Conspiracy Convicted of Terrorism Charges in Largest Multi-Defendant ISIL-Related Case in United States
Guled Ali Omar, Abdurahman Yasin Daud and Mohamed Abdihamid Farah were convicted by a federal jury today of conspiring to commit murder in Syria on behalf of the Islamic State of Iraq and the Levant (ISIL) and to provide material support to the designated foreign terrorist organization. Omar was also convicted of one count of attempted financial aid fraud, and Farah was also convicted of one count of perjury and providing a false statement.
The convictions were announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Andrew M. Luger of the District of Minnesota and Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Division.
“In the first multi-defendant ISIL-related trial, Mohamed Farah, Abdirahman Daud and Guled Omar were convicted of conspiring to provide material support to the foreign terrorist organization and other federal offenses,” said Assistant Attorney General Carlin. “The defendants conspired with a larger group of individuals to travel to Syria to fight on behalf of ISIL. Countering terrorist threats remains the highest priority of the National Security Division. We will continue to work to disrupt the recruitment and radicalization of Americans by terrorist organizations, and bring to justice those who conspire to provide material support to terrorists. I would like to thank the many agents, analysts and prosecutors who worked tirelessly to secure these convictions.”
“The evidence in this case made clear that the defendants made a deeply personal and deliberate decision back in 2014,” said U.S. Attorney Luger. “They wanted to fight for a brutal terrorist organization, kill innocent people and destroy their own families in the process. This trial should serve as a wake-up call that it will take the entire community to stop terror recruiting in Minnesota.”
“These verdicts affirm the FBI's investigative efforts,” said Special Agent in Charge Thornton. “The FBI will not induce people to break our laws. However, the FBI, through all legal means at its disposal, will investigate and pursue those who aim to bring about harm to others.”
Between May 2014 and April 19, 2015, the three defendants and their co-conspirators made multiple attempts to join ISIL in Syria.
In May 2014, some members of the conspiracy, including Omar and co-conspirators Abdi Nur and Abdullahi Yusuf, traveled or attempted to travel to Syria to join ISIL. To facilitate the travel of his co-conspirators, Daud provided contact information for an ISIL member in Turkey to Nur and Yusuf so that they could gain assistance crossing the border from Turkey into Syria. Nur succeeded in his plan, joining ISIL in Syria in June 2014. Yusuf was stopped at the Minneapolis/St. Paul Airport and was later arrested.
Omar and two other members of the conspiracy also made an attempt to join ISIL by traveling across the U.S.–Mexico border near San Diego in May 2014, but failed when members of Omar’s family prevented his travel.
In October 2014, members of the conspiracy communicated with “Antar,” a self-described member of ISIL in Syria, about how best to travel to Syria to join ISIL. Members of the conspiracy met with one another to discuss routes, methods and the timing of leaving the United States to join ISIL in Syria.
Omar again attempted to join ISIL in Syria on Nov. 6, 2014, by flying from Minneapolis/St. Paul International Airport to San Diego, crossing the border into Mexico and traveling onward to Syria. Before he could board the flight in Minnesota, Omar was stopped at the airport and prevented from boarding the plane. In order to fund this second attempt to join ISIL in Syria, Omar intended to use federal financial aid provided to him by the U.S. Department of Education to attend college.
Also in November 2014, Farah and three of his co-conspirators, Zacharia Abdurahman, Hanad Musse and Hamza Ahmed, took a bus from Minneapolis to New York City and attempted to board flights to Europe with an eventual destination of Syria. Federal agents in New York prevented the four from traveling abroad.
In April 2015, Daud and Farah drove from Minneapolis to San Diego, where they intended to purchase fake passports, cross the border into Mexico and travel to Syria to join ISIL. Unbeknownst to them, the individual from whom they purchased the fake passports was a law enforcement officer and both were arrested by federal agents immediately after obtaining the phony travel documents.
Ten Minnesotans were charged as part of this conspiracy to provide material support to ISIL. The men are all associates and friends of one another. Six defendants pleaded guilty before trial and Nur remains a fugitive.
This case is the result of an investigation conducted by the FBI-led Joint Terrorism Task Force. The case is being prosecuted by Assistant U.S. Attorneys Andrew R. Winter, John Docherty and Julie Allyn of the District of Minnesota with assistance provided by the National Security Division’s Counterterrorism Section. The department would also like to thank the FBI’s San Diego and New York Field Offices and the U.S. Attorney’s Office of the Southern District of California for their contributions.
Eastern District of Tennessee United States Attorney’s Office Employees Honored by Department of Justice at Executive Office for United States Attorneys Director’s Awards CeremonyRead the Press Release
WASHINGTON – Sharry A Dedman-Beard, Public Information Officer/Law Enforcement Coordinator and Amy K. Veatch, Paralegal Specialist with the U.S. Attorney’s Office in the Eastern District of Tennessee were two of 160 recipients recognized by Deputy Attorney General Sally Yates and Executive Office for U.S. Attorneys (EOUSA) Director Monty Wilkinson at the 32nd annual Director’s Awards Ceremony on Thursday, June 1, 2016, in Washington D.C.
The Eastern District of Tennessee was one of 33 districts represented at the ceremony which was held in the Great Hall at the Robert F. Kennedy Department of Justice Building.
In her prepared remarks, Deputy Attorney General Yates said, “The achievements being recognized today reflect the breadth of the department’s responsibilities, and some of our most significant challenges. From dismantling dangerous gangs, drug cartels and human trafficking operations to tackling political corruption, white collar crimes, and international terrorism, these awardees have taken on our toughest cases. And the citizens of our country are safer because of their work.”
“We honor the truly talented and dedicated legal and administrative personnel in the 94 U.S. Attorneys’ offices and our law enforcement partners who everyday touch lives in our communities, protect the American people, and work to ensure the fair and impartial administration of justice,” said Director Wilkinson.
Sharry A. Dedman-Beard received the 2016 Director’s Award for Superior Performance in Public Affairs. She was recognized for her extraordinary efforts in coordinating the media response in July 2015, when a homegrown violent extremist shot and killed five soldiers at a Marine recruiting station and National Guard facility in Chattanooga. Ms. Dedman-Beard worked closely with the U.S. Attorney, FBI, and other federal, state and local public information officers to facilitate the controlled release of information to international and domestic media representatives. She consulted with the public affairs contacts at EOUSA and the Department’s National Security Division; composed press releases; organized press conferences; and served as a contact for those state and local political and public figures that were anxious to be a part of the response and investigation. She was also recognized for demonstrating her expertise in media relations by her response to the press in other high profile criminal cases throughout the district. Her relationship with the district’s media and law enforcement agencies and her expertise enhanced the public relations efforts of the U.S. Attorneys’ office.
Amy K. Veatch received the 2016 Director’s Award for Superior Performance in a Litigative Support Role. Ms. Veatch was recognized for her outstanding organizational and technological skill in preparing discovery, trial exhibits, and electronic presentations of evidence at complex trials in the Chattanooga Division. Specifically, her management of a recent high profile case demonstrated her unsurpassed value to the office. She led discovery and preparation of 502 electronic trial exhibits, which stemmed from her tackling the inventory and management of 275,000 pages of medical records seized from several pill mills. She devised a medical reports tracking system for data from multiple agencies, spanning several years of investigation. She also created timelines, maps, summary charts, and edited audio and video exhibits taken from hours of video surveillance, undercover recordings, and 60 days of wire interceptions of thousands of pertinent calls. The defendant’s conviction and 280-year prison sentence - and the resulting chilling effect on would-be pill mill operators in the district and elsewhere - were made possible by Ms. Veatch’s technological and organizational expertise, intelligence, and heartfelt commitment to the mission of the Department.
“These awards are tangible proof of the respect that Sharry Dedman-Beard and Amy Veatch have earned through their dedication to the mission of the Department of Justice in the Eastern District of Tennessee. Our district takes great pride in their achievement and accomplishments, and joins the Director in thanking them for their service to the United States,” said Acting U.S. Attorney Nancy Stallard Harr.
EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ offices around the country. For more information on EOUSA and its mission, visit http://www.justice.gov/usao.
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District Man Sentenced to 33 Years in Prison for Sexually Assaulting Two Women in AlleyRead the Press Release
WASHINGTON - Hassain Smart, 20, of Washington, D.C., was sentenced today to 33 years in prison on charges stemming from sexual assaults he committed against two women in an alley in Northwest Washington, U.S. Attorney Channing D. Phillips announced.
Smart pled guilty in December 2015, in the Superior Court of the District of Columbia, to charges of first-degree sexual abuse while armed, first-degree sexual abuse with aggravating circumstances, robbery while armed, and kidnapping while armed. The plea, which was contingent upon the Court’s approval, called for a prison term of 27 to 33 years. The Honorable Jennifer Anderson accepted the plea today and sentenced the defendant accordingly. Following his prison term, Smart will be placed on supervised release for the rest of his life. Smart also will be required to register as a sex offender for the remainder of his life.
According to the government’s evidence, at about 1 a.m. on June 25, 2015, the two victims began to open the door to their home in the unit block of T Street NW when Smart, a stranger, approached from behind and brandished what appeared to be a black handgun. He led both women through a dark alley into a muddy area between a fence and a vacant house under construction. Smart raped both women in the alley while continuing to brandish the weapon.
After the sexual assaults, Smart refused to allow the victims to leave until they surrendered their cell phones and a debit card to him. When he finally left, the victims contacted law enforcement, and detectives from the Sexual Assault Unit of the Metropolitan Police Department (MPD) responded and immediately began an investigation.
An MPD patrol officer in the Seventh District spotted the defendant, who matched the description given by the victims. Smart was arrested after police found the victims’ cell phones and debit card and the weapon in his possession. Smart then confessed to kidnapping, robbing, and sexually assaulting both women while brandishing the weapon.
After reporting the assault to the police, the victims were transported to Washington Hospital Center for a Sexual Assault Nurse Examination (SANE), which included collection of forensic evidence. Bode Technologies later conducted DNA testing and concluded that the major male profile found on intimate swabs from a victim’s SANE kit matched the DNA profile of the defendant.
On April 2, 2016, while incarcerated pending sentencing, Smart attempted to escape from the Correctional Treatment Facility (CTF) in Washington, D.C., but his escape attempt was thwarted by correctional officers. During his attempt, Smart first jumped over the jail recreation yard’s inner perimeter fence. After jumping that fence, he pulled a white bed sheet that he had hidden in his pants leg. Smart spent several minutes surveying the outer perimeter fence while holding the sheet, until he was ordered by correctional officers to drop the sheet and lay on the ground. On May 13, 2016, Smart pled guilty to a charge of escape. He was sentenced today to six months in prison for that offense, to run consecutively to his other prison sentence.
In announcing the sentence, U.S. Attorney Phillips commended the work of the detectives of the Metropolitan Police Department’s Sexual Assault Unit, the Fifth and Seventh Police Districts, and crime scene technicians. He also expressed appreciation to Bode Technologies. He also commended those who worked on the case from the U.S. Attorney’s Office, including Victim/Witness Advocate Veronica Vaughan and Paralegal Specialists Tierra Nanches and Jason Manuel. Finally, he acknowledged the efforts of Assistant U.S. Attorneys Amy Zubrensky and Julianne Johnston, who prosecuted the case.
Deputy Attorney General Sally Q. Yates Statement on the President's Recent Clemency DecisionsRead the Press Release
Deputy Attorney General Sally Q. Yates released the following statement following President Obama’s clemency announcement today:
"Our responsibility at the Department of Justice is to seek justice and that includes rectifying disproportionately long sentences for certain drug offenders sentenced under outdated laws. The President has used his clemency authority today to give more individuals a second chance to live law abiding lives and we are confident that there will be many more commutations in the months
Defense Lawyer Pleads Guilty to Disrupting State Court ProceedingRead the Press Release
BOSTON – A Boston lawyer pleaded guilty today to disrupting a state court proceeding by repeatedly encouraging the victim of a hate crime to ignore calls from state and federal law enforcement officials.
Timothy R. Flaherty, 51, of Cambridge, was indicted in May 2015 on federal witness tampering charges. Today, he pleaded guilty to related state charges in Middlesex Superior Court in order to resolve the federal charges. According to the plea agreement, Flaherty will be placed on probation for one year, must refrain from practicing law during that period, and submit to professional discipline by the Massachusetts Board of Bar Overseers.
Flaherty is a criminal defense attorney and was retained to represent a defendant in Cambridge District Court who was facing state civil rights charges. Shortly after Flaherty’s client was arraigned in state court, Flaherty contacted the victim of the case and offered him cash in exchange for informing state authorities that the victim was too busy to pursue the case and no longer wanted to assist in the prosecution of Flaherty’s client. On Dec. 24, 2014, Flaherty met the victim and provided him with an envelope that contained $2,500 in cash. He instructed the victim to ignore contact from law enforcement authorities and in the event he received a subpoena to appear, he was to immediately call Flaherty. On March 12, 2015, during a hearing at Cambridge District Court, Flaherty pressed for a trial date and then asked the Assistant District Attorney whether the Middlesex District Attorney’s Office had been able to contact the victim.
On May 6, 2015, the victim informed Flaherty that he had received a letter from the District Attorney’s Office. Flaherty instructed the victim to tell the District Attorney’s Office, “I have no interest in this. I’d have to come to court, I really don’t want anything to do with it. Um, you know the guy had a bad day and I’m just not going to testify ….” Flaherty also told the victim, “…they won’t press you, they won’t subpoena you, if they try to, just duck it….”
The victim then informed Flaherty that he had received a voice message from an employee of the United States Attorney’s Office who wanted him to call her back regarding the alleged indictment. Flaherty told the victim to, “blow her off.” The victim stated to Flaherty that this U.S. Attorney’s Office employee said she was from “civil rights.” Flaherty continued to advise the victim not to call her back.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney William Bloomer of Ortiz’s Public Corruption Unit who was sworn in as a Special Assistant Attorney General to handle this matter in Middlesex Superior Court.
Davenport Man Sentenced to Prison for Felon in Possesion of a Firearm ChargeRead the Press Release
DAVENPORT, IA – On June 2, 2016, Ali Suarez, 21, of Davenport, Iowa, was sentenced by United States District Court Judge Stephanie M. Rose to 60 months in prison, following Suarez’s guilty plea on March 2, 2016, to a felon in possession of a firearm charge announced Acting United States Attorney Kevin E. VanderSchel. Suarez was ordered to serve three years of supervised release after his prison term and to pay $100 to the Crime Victim’s Fund.
On October 15, 2015, Davenport police officers were dispatched to a gun shots fired complaint. Officers searched the area and recovered a Hi-Point .45 caliber semiautomatic handgun. The investigation revealed Suarez and his fellow gang members were feuding with a rival gang. During the altercation, Suarez fired the handgun recovered by the police.
This matter was investigated by the Davenport Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa as part of the Project Safe Neighborhood initiative.
Convicted Felon Sentenced to 8 Years for Buying Firearms at Gun ShowRead the Press Release
ALEXANDRIA, Va. – Josiah John Weiss, 36, of Suitland, Maryland, was sentenced today to 96 months in prison for possession of firearms as a convicted felon.
Weiss was found guilty by a federal jury on March 9. According to court documents and evidence presented at trial, on April 25, 2015, Weiss purchased two semiautomatic pistols and an AR-15 rifle, along with magazines and gun cases for each, from a private seller at The Nation’s Gun Show in Chantilly. Weiss was observed doing so by Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives. Due to his suspicious behavior, he was followed by ATF agents as he drove away from the parking lot of the Dulles Expo Center, where the gun show was being held. When Weiss discovered that he was being followed, he began driving erratically and at high speeds and eventually eluded the agents. Later that day agents executed a search warrant at an apartment Weiss had been living in at the time in Alexandria. Neither Weiss nor the three firearms were found there. Law enforcement remained unaware of Weiss’ whereabouts until Nov. 10, 2015, when he was arrested outside one of his two apartments in Suitland. Despite a search of those two apartments, the firearms were not recovered. Weiss had been convicted of aggravated identity theft and passport fraud, both felonies, in 2011, and thus was prohibited from possessing firearms.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Michael Boxler, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after sentencing by U.S. District Judge T.S. Ellis, III. Assistant U.S. Attorneys Carina A. Cuellar and Michael E. Rich prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-354.
Catoosa Man Pleads Guilty to Wire Fraud, Money Laundering and Failure to Pay Employment TaxRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma, announced that DAVID GLENN MOORE, JR., age 49, of Catoosa, Oklahoma, entered a guilty plea yesterday to an Information filed on May 26, 2016 charging MOORE with WIRE FRAUD, in violation of Title 18, United States Code, Section 1343, punishable by not more than 20 years imprisonment, up to a $250,000.00 fine or both; MONEY LAUNDERING, in violation of Title 18, United States Code, Section 1956(a)(1)(A)(i), punishable by not more than 20 years imprisonment, up to a $500,000.00 fine or both; and FAILURE TO ACCOUNT AND PAY OVER EMPLOYMENT TAX, in violation of Title 26, United States Code, Section 7202, punishable by not more than 5 years imprisonment, up to a $250,000.00 fine or both and a CRIMINAL FORFEITURE ALLEGATION.
The Information alleged during the period of on or about July 1, 2009 through on or about June 12, 2014, defendant MOORE, the former Executive Director of the Tahlequah Area Chamber of Commerce (TACC), devised and intended to devise a scheme to defraud TACC, and to obtain money and property by means of materially false and fraudulent pretenses, representations and promises. The Information further alleged that the Manner and Means of the scheme to defraud included the following:
- MOORE used a debit card on the TACC checking account to make unauthorized Automated Teller Machine (ATM) transactions for cash and to make unauthorized purchases and ATM withdrawals at casinos, racetracks and online gaming websites.
- MOORE caused checks from the TACC checking account to be made payable to MOORE and also caused checks from the TACC checking account to be made payable to “Cash” which he negotiated and kept the money.
- MOORE, acting without the consent or authority of the TACC Board of Directors, applied for and obtained an unauthorized loan from Bank of Cherokee County, a financial institution involved in interstate and foreign commerce. MOORE also obtained unauthorized loans from various individuals.
During the term of the scheme to defraud, MOORE defrauded TACC, and unlawfully obtained approximately $439,660.62. The Information further alleged that MOORE willfully failed to truthfully account for and pay over to the Internal Revenue Service payroll taxes totaling $45,556 for the years 2011, 2012 and 2013 which were due and owing to the United States on behalf of the TACC and its employees.
The charges are a result of an investigation by the Tahlequah Police Department, the Oklahoma State Bureau of Investigation, the Oklahoma State Auditor and Inspector, and the Internal Revenue Service – Criminal Investigative Division.
Assistant United States Attorney Christopher Wilson represented the United States.
- MOORE used a debit card on the TACC checking account to make unauthorized Automated Teller Machine (ATM) transactions for cash and to make unauthorized purchases and ATM withdrawals at casinos, racetracks and online gaming websites.
California Woman Sentenced for Possession and Distribution of NarcoticsRead the Press Release
BISMARCK – U.S. Attorney Christopher C. Myers announced that on June 2, 2016, Victoria Elaine Reyes, a/k/a Victoria Elaine Allen, 46, Taft, California, was sentenced before U.S. District Daniel L. Hovland on charges of Possession with Intent to Distribute a Controlled Substance (Methamphetamine) and Possession with Intent to Distribute a Controlled Substance (Heroin).
Reyes pled guilty to the charges on February 17, 2015. Judge Hovland sentenced Reyes to serve 15 years in federal prison, to be followed by five years of supervised release on each count, to be served concurrently. Reyes was ordered to pay a $200 special assessment to the Crime Victim’s Fund.
In early 2014, law enforcement officials with the Southwest Narcotics Task Force in Dickinson, North Dakota, were investigating the distribution of methamphetamine and heroin in western North Dakota. On March 23, 2014, related to this investigation, a traffic stop was made near Bowman, North Dakota, and law enforcement officials seized approximately two pounds of methamphetamine and a half pound of heroin that had been transported from California. Three individuals in the vehicle were arrested, including Reyes. Reyes had arranged for the transportation of the drugs and intended to distribute them in western North Dakota.
The case was investigated by the Southwest Narcotics Task Force, the North Dakota Bureau of Criminal Investigation, and the Drug Enforcement Administration (DEA).
Assistant U.S. Attorney David Hagler prosecuted the case.
Brothers Sentenced on Visa Fraud ConvictionsRead the Press Release
DALLAS — Two brothers who were convicted at trial in November 2015 on felony offenses stemming from a conspiracy they ran to commit visa fraud to secure a low-cost workforce at their information technology consulting company headquartered in Carrollton, Texas, were sentenced today to lengthy federal prison terms, announced U.S. Attorney John Parker of the Northern District of Texas.
Atul Nanda, 46, and his brother, Jiten “Jay” Nanda, 45, were each sentenced by Chief U.S. District Judge Barbara M. G. Lynn to 87 months in federal prison. Each was convicted on one count of conspiracy to commit visa fraud, one count of conspiracy to harbor illegal aliens, and four counts of wire fraud. The brothers, who have been on bond, were remanded to the custody of the U.S. Marshals Service.
Dibon Solutions is an information technology consulting company located on Chenault Drive in Carrollton; it is a family operation created by the Nanda family. Atul and Jiten Nanda created, established, and ran the corporation that they used to commit fraud through the H1-B visa program.
“The H-1B visa program is a powerful and positive tool for businesses and foreign workers alike when properly used,” said U.S. Attorney Parker. “When employers abuse the program, however, the foreign workers become a captive stable of cheap labor, victimized to the company’s financial benefit.”
“This federal investigation uncovered Dibon’s deeply rooted conspiracy of maximizing its profits at all costs,” said Katrina W. Berger, special agent in charge of Homeland Security Investigations (HSI) Dallas. “These two brothers created a highly profitable, and highly illegal business model at the extreme expense of the alien workforce that they recruited. In addition, this same illegal business model operated at an unfair advantage to Dibon’s competition since it had a much lower operating overhead.”
The H-1B visa program allows businesses in the U.S., such as Dibon, to temporarily employ foreign workers with specialized or technical expertise in a particular field such as accounting, engineering, or computer science.
The Nanda brothers recruited foreign workers with expertise who wanted to work in the U.S. They sponsored the workers’ H-1B visa with the stated purpose of working at Dibon headquarters in Carrolton, but, in fact, did not have an actual position at the time they were recruited and knew the workers would ultimately provide consulting services to third-party companies located throughout the U.S. Contrary to representations made by the conspirators to the workers (and the government), Jay and Atul Nanda directed that the workers only be paid for time spent working at a third-party company and only if the third-party company actually first paid Dibon for the workers’ services. Additionally, in Dibon’s visa paperwork, the conspirators falsely represented that the workers had full-time positions and were paid an annual salary, as required by regulation to secure the visas.
This scheme provided the conspirators with a labor pool of inexpensive, skilled foreign workers who could be used on an “as needed” basis. The scheme was profitable because it required minimal overhead and Dibon could charge significant hourly rates for a computer consultant’s services. Thus, the Nandas, as Dibon’s owners, earned a substantial profit margin when a consultant was assigned to a project and incurred few costs when a worker was without billable work. This scheme is known as “benching.” Dibon actively recruited H-1B workers for the “bench.”
The Nandas required the H-1B visa candidates to pay the processing fees that the law requires to be paid by the company. The Nandas attempted to hide this, however, by having the H-1B candidates pay the fees directly to Dibon either with cash or a check written to “Dibon Training Center.”
The three other defendants charged in the case, Siva Sugavanam, 37, Vivek Sharma, 48, and Rohit Mehra, 39, who each pleaded guilty before trial to one count of aiding and abetting visa fraud, were each sentenced earlier this month by Judge Lynn to two years’ probation. Sugavanam was the lead recruiter for Dibon; Sharma acted as Dibon’s office manager; and Mehra recruited employees for the bench and transported benched employees to and from Dibon Headquarters. All three had knowledge of and/or involvement in the filing of false documents with the Department of Labor and the Department of Homeland Security (DHS) in securing recruits’ employment with Dibon.
The case was investigated by U.S. Immigration and Customs Enforcement, HSI and the U.S. Department of State.
Special Assistant U.S. Attorney Danial Gividen and Assistant U.S. Attorney Paul Yanowitch prosecuted the case.
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Brevard County Elementary School Principal Charged with Possession of Child PornographyRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that Ricky Delano Sheppard (59, Brevard County) was arrested and charged by criminal complaint today with possession of child pornography. If convicted, he faces up to 20 years in federal prison, and up to a lifetime of supervision. At the time of the incident, Sheppard was working as a principal at the Holland Spessard Elementary School, in Brevard County.
According to court records, on June 3, 2016, agents assigned to the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and Brevard County Sheriff’s Office task force executed a search warrant at Sheppard’s residence in Brevard County. During a forensic examination of Sheppard’s computer media, computer experts found hundreds of images of child pornography.
Sheppard made his initial appearance in federal court earlier today, in Orlando. He remains detained pending further proceedings. A preliminary and detention hearing has been scheduled for Wednesday, June 8, 2016, before U.S. Magistrate Judge Gregory J. Kelly.
This case was investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, with the assistance from the Brevard County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Ilianys Rivera Miranda.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Bloods Gang Member Sentenced to Prison for Prostituting a MinorRead the Press Release
NORFOLK, Va. – Cordario Marcell Uzzle, 23, of Virginia Beach, was sentenced today to 151 months in prison for sex trafficking of a child. He was also sentenced to 10 years of supervised release.
Uzzle pleaded guilty on February 19. According to court documents, Uzzle was a member of a set of the Bloods street gang based in Virginia Beach. Along with several other Bloods gang members, Uzzle prostituted a 16 year-old foster-care runaway over a two-week period in the fall of 2015. The girl was forced to work for several different gang members, and performed commercial sex acts from hotels in Norfolk and Virginia Beach. Uzzle posted prostitution advertisements on the Internet, rented rooms in which prostitution appointments were performed, collected the proceeds earned, and carried a firearm to protect himself and his victims, as well as to intimidate his victims and their customers.
In October 2015, the sex trafficking ring was discovered when the 16 year-old victim was transported to the hospital after Uzzle violently attacked her. As a result of the ensuing federal investigation, seven total Bloods gang members or associates have been charged for their roles in this conspiracy to engage in sex trafficking of minor and three other victims have been identified.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; John S. Adams, Special Agent in Charge of the FBI’s Norfolk Field Office; and James A. Cervera, Chief of Virginia Beach Police, made the announcement after sentencing by U.S. District Judge Arenda L. Wright Allen. Assistant U.S. Attorney V. Kathleen Dougherty prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16-cr-2.
Atlantic County, New Jersey, Woman Sentenced to Six Years in Prison for $3 Million Time-Share Mortgage Fraud SchemeRead the Press Release
CAMDEN, N.J. – An Atlantic County, New Jersey, woman was sentenced today to 72 months in prison for her role in a $3 million conspiracy to scam customers by offering phony consulting services to owners of timeshares through the New Jersey-based Vacation Ownership Group LLC, U.S. Attorney Paul J. Fishman announced.
Ashley Lacerda, 36, of Egg Harbor Township, New Jersey, was convicted in September 2013 of one count of conspiracy to commit mail and wire fraud, one count of mail fraud and four counts of wire fraud following a seven-week trial before U.S. District Judge Noel L. Hillman in Camden federal court.
According to documents filed in this case and the evidence presented at trial:
Ashley Lacerda and her codefendants schemed to defraud hundreds of timeshare owners by offering fraudulent consulting services through their company, the Vacation Ownership Group (now VO Financial). Her husband, Adam Lacerda, 32, the company founder, president and chief executive officer, devised the company’s fraudulent sales pitches. He directed his sales force to tell numerous lies to VO customers, including that VO worked with the banks holding the customers’ loans, would use money sent by customers to pay off the customers’ loans on their timeshares, and could cancel customers’ timeshares with money back. Ashley Lacerda, the company vice president and chief operating officer, sent fraudulent contracts to customers and managed the office.
Three codefendants were convicted with Ashley Lacerda at the same trial: Ian Resnick, 41, of Absecon, New Jersey, a convicted bank robber, started as a salesman giving the fraudulent sales pitch but became Adam Lacerda’s enforcer, with the title “director of compliance.” Genevieve Manzoni, 50, of Lake Worth, Fla. was a top VO sales representative who falsely told one victim she worked with a bank, another victim that she worked with a timeshare developer. Adam Lacerda was sentenced in June 2015 to 324 months in prison; Resnick was sentenced in April 2016 to 18 years in prison and Manzoni was sentenced in December 2015 to 42 months in prison.
The 15 victims who testified at trial – including business executives, veterans, senior citizens, a lawyer and a professor – were defrauded out of a total of $200,000 by the defendants’ sophisticated scheme.
In addition to the prison term, Judge Hillman sentenced Ashley Lacerda to three years of supervised release. Restitution will be determined at a later date.
U.S. Attorney Fishman credited special agents of FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and special agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent Cheryl Garcia, New York Region, for the investigation. He also thanked the N.J. Department of Labor and Workforce Development for its assistance.
The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel:
Adam Lacerda: Mark E. Cedrone Esq., Philadelphia
Ashley Lacerda: Charles Nugent Esq., Marlton, New Jersey
Ian Resnick: Michael E. Riley Esq., Philadelphia
Genevieve Manzoni: Robert L. Tarver Jr. Esq., of Toms River, New Jersey
Ashburn Man Sentenced for Sex Trafficking a Child and Sex Tourism CrimesRead the Press Release
ALEXANDRIA, Va. – Eric Noe Araujo Flores, of Ashburn, was sentenced today to 300 months in prison for various sex tourism and sex trafficking crimes. Araujo Flores was also ordered to pay approximately $40,000 in restitution to his victim.
“Sex tourism and sex trafficking of children are vicious crimes that result in irreparable harm to the victims,” said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “We will continue to work diligently to prosecute those who travel to foreign countries to prey upon children.”
“Today’s sentencing sends a strong message: Diplomatic Security is committed to making sure that those who commit sex trafficking of children, and sex trafficking customers, face consequences for their criminal actions,” said Bill A. Miller, Director of the U.S. State Department’s Diplomatic Security Service. “Diplomatic Security’s strong relationship with the U.S. Attorney’s Office and other law enforcement agencies around the world continues to be essential in the pursuit of justice.”
According to court documents and testimony at trial, Araujo Flores was introduced to a 14-year-old victim while she lived in El Salvador. Araujo Flores learned that street gangs were threatening her and her family with violence and he offered to help them escape from the gangs, promising financial support in exchange for sexual acts with the minor. In July 2013, he travelled to his native El Salvador with gifts and money, and after meeting with the victim’s mother, he had sex with the victim in a hotel room. After he left, Araujo Flores continued to contact the victim via telephone and later made two more trips to El Salvador to have sex with the victim. He paid cash for some of the sex acts, and also provided money for rent, food, clothing, and jewelry to the victim and her family.
In June 2014, Araujo Flores arranged for the victim and her mother to be smuggled from El Salvador into the United States through Texas. Ultimately, the victim and her mother stayed at a house Araujo Flores owned in Sterling, and periodically he would come to the home to have sex with the victim. Araujo Flores provided the victim with a counterfeit permanent resident card which included a false birthdate indicating she was over the age of 18. When the victim expressed that she did not want to have sex with Araujo Flores, he threatened her and said that if she told Araujo Flores’ wife about the sex, his wife would beat her and he would have the victim and her mother deported to El Salvador. Araujo Flores also threatened to stop providing food and to evict the victim and her mother from their apartment if she stopped having sex with him.
On Feb. 19, 2016, a federal jury convicted Araujo Flores of nine offenses, including four counts of sex trafficking of a child, three counts of foreign travel with intent to engage in illicit sexual conduct (also known as sex tourism), coercion and enticement, and harboring an alien for an immoral purpose.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Bill A. Miller, Director of the Diplomatic Security Service (DSS) for the U.S. Department of State; Colonel Edwin C. Roessler, Jr., Fairfax County Chief of Police; and Michael L. Chapman, Loudoun County Sheriff, made the announcement after sentencing by U.S. District Judge Liam O’Grady.
The case was investigated by DSS, the Loudoun County Sheriff’s Office, and the Fairfax County Police Department. Assistant U.S. Attorney Michael J. Frank prosecuted the case.
If you believe you are a victim in this case, please call the Fairfax County Police Department non-emergency number at 703-691-2131.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-CR-320.
3 New Defendants, including Chiropractor, Plead Guilty in Scheme involving nearly $600 Million in Fraudulent Claims by SoCal HospitalsRead the Press Release
Santa Ana, California – As two criminal cases became public this week, the Justice Department today announced three cases in which additional defendants have pleaded guilty to federal charges for participating in a long-running health care fraud scheme that illegally referred thousands of patients for spinal surgeries and generated nearly $600 million in fraudulent billings over an eight-year period.
The three new defendants join six others who were previously charged in relation to the government’s ongoing investigation into kickbacks for patient referrals and fraudulent bills for spinal surgeries performed at Pacific Hospital in Long Beach. The scheme involved tens of millions of dollars in illegal kickbacks to dozens of doctors, chiropractors and others. As a result of the illegal payments, thousands of patients were referred to Pacific Hospital, where they underwent spinal surgeries that led to more than $580 million in fraudulent bills being submitted during the last eight years of the scheme alone. Many of the fraudulent claims were paid by the California worker’s compensation system and the federal government through the Federal Workers’ Compensation System.
Two of the three new cases were recently ordered unsealed by United States District Judge Josephine L. Staton. The documents in the two unsealed cases became publicly available this week. In the now-unsealed cases and another case recently filed:
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Michael R. Drobot, 44, of Newport Beach, the son of Pacific Hospital owner Michael D. Drobot (Drobot Senior), pleaded guilty on March 4 to conspiracy and illegal kickback charges. Drobot Junior is scheduled to be sentenced on November 18.
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Chiropractor Michael E. Barri, 48, of San Clemente, who owned and operated the Santa Ana companies Tri-Star Medical Group and Jojaso Management Company, pleaded guilty on March 11 to a conspiracy count and admitted that he received illegal kickbacks for referrals to Pacific Hospital from 2009 through October 2013. During a nine-month period that ended in 2013, Barri admitted receiving $158,555 in illegal kickbacks after referring a dozen patients to Pacific Hospital, where they had back surgeries. As a result of his referrals, Pacific Hospital billed insurance carriers approximately $3.9 million for spinal surgeries. Barri is scheduled to be sentenced by Judge Staton on January 13, 2017.
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Linda Martin, 66, of Clovis, California, who was a marketer for Pacific Hospital who recruited medical professionals and others to refer patients with promises of kickbacks, pleaded guilty to a conspiracy charge on May 27. She is scheduled to be sentenced on August 19.
These three defendants join six others – including Drobot Senior – who have also pleaded guilty. All nine defendants have agreed to cooperate with the government’s ongoing investigation – dubbed “Operation Spinal Cap” – into the kickback scheme, which involved dozens of surgeons, orthopedic specialists, chiropractors, marketers and other medical professionals.
“Federal law prohibits kickbacks to health care professionals because these payments impose additional costs on all patients and corrupt the relationship between the doctor and patient,” said United States Attorney Eileen M. Decker. “This scheme resulted in what can only be called a massive amount of fraudulent billing. The continuing investigation into the scheme demonstrates our commitment to protecting patients and prosecuting those in the health care industry who care more about money than those in their care.”
“The guilty pleas announced today are the latest step in holding accountable the individuals who co-opted doctors and other specialized healthcare workers to carry out multiple kickback conspiracies that abused the state and federal healthcare systems for more than a decade,” said Deirdre Fike, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “The continuing results of Operation Spinal Cap are based on a tremendous effort by investigators and prosecutors handling this case, which is among the largest healthcare fraud schemes to be perpetrated in the state of California.”
As described in court documents, Drobot Senior – who was the owner and/or CEO of Pacific Hospital of Long Beach until late 2013 and who pleaded guilty in April 2014 – ran a 15-year-long scheme in which he and others submitted hundreds of millions of dollars in bills to workers’ compensation insurers and the U.S. Department of Labor for spinal surgeries and other procedures performed on patients who had been referred by dozens of doctors, chiropractors and others who were paid illegal kickbacks.
As part of the scheme, members of the conspiracy typically paid a kickback of $15,000 for each lumbar fusion surgery and $10,000 for each cervical fusion surgery. Some of the patients lived hundreds of miles away from Pacific Hospital, and closer to other qualified medical facilities. The patients were not informed that medical professionals had been offered kickbacks to induce them to refer the surgeries to Pacific Hospital. From 2005 through 2013 (which is only part of the overall scheme), Pacific Hospital billed insurers more than $580 million for spinal surgeries related to over 4,400 patients. Insurers paid the hospital more than $226 million for the surgeries performed as a result of illegal kickbacks.
Those involved in the scheme concealed the kickback payments by entering into bogus contracts to provide a “cover story” for the doctors, chiropractors and others who received illegal payments. For example, a number of doctors entered into agreements with a company owned by Drobot Senior, Pacific Specialty Physician Management (PSPM), under which the doctors received as much as $100,000 per month from PSPM in return for the right to purchase their medical practices – an option that was never exercised. In other cases, Pacific Hospital entered into contracts with doctors under which the doctors were to help the hospital collect on its surgery bills to insurance companies, but the hospital’s own collection staff, rather than the doctors, actually performed the collections work. Several doctors entered into lease agreements under which PSPM or Pacific Hospital paid rent for the use of office space, but rarely used the space. And other doctors had agreements to provide consulting services to Drobot’s companies, but did not actually provide the services. Still others, including marketers who introduced doctors to Pacific Hospital, had additional agreements with Drobot’s companies.
Two other Drobot companies – California Pharmacy Management (CPM) and its successor, Industrial Pharmacy Management (IPM) – were also important players in the scheme. Both companies set up and managed what were essentially mini-pharmacies within doctors’ offices. CPM and IPM bought and dispensed medication that the doctors prescribed to their patients, and these businesses received a portion of the money reimbursed by insurance companies for the medications. Drobot Senior, along with others at CPM and IPM, often agreed to increase the doctors’ shares of the insurance claims in return for those doctors’ referral of patients to Pacific Hospital. In many cases, for doctors who made such referrals, the conspirators “advanced” payments from CPM and IPM before the companies had collected any money for the medications or even prescribed them, and often simply wrote off these payments as losses when collections fell short. Drobot Junior was involved in these companies for over a decade, first as the manager of CPM, and then as co-owner and manager of IPM.
In his plea agreement, Drobot Junior admitted participating in the kickback scheme, primarily through his operation of CPM and IPM. As far back as 2005, Drobot Junior began personally soliciting doctors and chiropractors to enter into contracts with CPM and specifically discussed kickback arrangements, which were finalized by his father. Drobot Junior later acted a liaison when disputes arose concerning the payment of kickbacks to medical professionals or when those kickback recipients did not refer as many patients as expected.
Drobot Junior also admitted that he induced doctors who had contracted with CPM or IPM to also use products and services by companies he was affiliated with, including Medi-Lab Corporation. In return for referrals to Medi-Lab, Drobot Junior received monthly payments, some of which he used to make kickback payments to the doctors.
“These unscrupulous defendants thought they had figured out a clever scheme to line their pockets in their bilking of the insurance system. Federal and state worker’s compensation programs were not designed as a slush fund for the greedy,” stated IRS Criminal Investigation Acting Special Agent in Charge Anthony J. Orlando. “Law enforcement is serious about investigating these crimes and holding accountable those who defraud government health care programs and deprive patients of their right to honest services.”
“Kickback schemes such as these threaten the financial integrity of public healthcare programs,” said Special Agent in Charge Scott Pierce, USPS Office of Inspector General, Contract Fraud Investigations Division. “The workers’ compensation program benefits thousands of postal employees who have received legitimate on-the-job injuries. This case should send a clear message to all health care providers that workers’ compensation fraud is a federal crime that carries serious consequences and will not be tolerated.”
When he is sentenced, Drobot Junior will face a statutory maximum penalty of 10 years in federal prison.
Barri and Martin each face potential prison sentences of five years as a result of their guilty pleas.
Last year, the United States Attorney’s Office announced charges against five other defendants, including two doctors involved in the Pacific Hospital kickback scheme, and a similar scheme involving Tri-City Regional Medical Center in Hawaiian Gardens.
The ongoing investigation into abuses involving kickbacks paid for spinal surgery patients is being conducted by the Federal Bureau of Investigation; the United States Postal Service, Office of Inspector General; IRS Criminal Investigation; and the California Department of Insurance.
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2 June 2016
Woodinville Drywall Installation Company Sentenced for Immigration ViolationRead the Press Release
A Woodinville, Washington drywall company and its owner were sentenced today in U.S. District Court in Seattle to financial penalties and a probationary sentence for repeated violations of the Immigration Reform and Control Act of 1986, announced U.S. Attorney Annette L. Hayes. DJ DRYWALL, INC., and owner DAVID L. JONES, 47, pleaded guilty in February 2016 to knowingly encouraging and inducing a Mexican national to reside in the United States in violation of law. The guilty plea follows three different investigations and two civil fines regarding the company’s practice of illegally hiring undocumented workers.
“This employer repeatedly hired an illegal workforce as though the rules did not apply to him,” said U.S. Attorney Annette L. Hayes. “Allowing some businesses to ignore hiring rules creates an uneven playing field for all. These prosecutions are aimed at stopping this conduct and eliminating conditions for workers that are often unsafe and unsound.”
According to records filed in the case, DAVID L. JONES has a long work history in the drywall industry. He incorporated DJ DRYWALL in 2006 and is the company president and sole stockholder. In both 2008 and 2011, DJ DRYWALL was audited by Immigration and Customs Enforcement (ICE) and paid fines for violating immigration rules related to I-9’s -- a form required for employment. Due to the violations in 2008, DJ DRYWALL paid a $32,316 fine. Following a second audit in 2011, the company paid $27,405 for knowingly hiring 21 unauthorized aliens. A third investigation in 2013 again revealed a pattern of hiring unauthorized workers and paying them ‘off the books,’ or encouraging them to submit false I-9 documents or green cards.
Under the terms of the plea agreement, DAVID L. JONES forfeited $25,000 to the United States today at the sentencing hearing. JONES will be on two years of probation. The company will be on probation for five years and will pay a $75,000 fine over the next five years. While on probation JONES will be required to qualify all his employees through the E-Verify internet system.
“ICE is committed to holding businesses accountable when they knowingly hire an illegal workforce,” said Brad Bench, special agent in charge for ICE HSI in Seattle. “Employers who willfully violate our nation’s hiring laws gain an unfair economic advantage over their law abiding competitors. Our goal is to protect job opportunities for the nation’s legal workers and level the playing field for those businesses that play by the rules.”
The case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigation (HSI) and was prosecuted by Special Assistant United States Attorney Don Reno. Mr. Reno is an attorney with U.S. Immigration and Customs Enforcement specially designated to prosecute immigration crimes in federal court.
Wilkes-Barre Man Sentenced in Federal Court for Failing to Comply with Sex Offender Registration RequirementsRead the Press Release
SCRANTON-The United States Attorney's Office for the Middle District of Pennsylvania announced that a Wilkes-Barre man was sentenced today in federal court in Scranton by United States District Judge James M. Munley, to serve 41 months in prison on the charge of failing to comply with sex offender registration requirements.
According to United States Attorney Peter Smith, Joseph Brant, age 56, a resident of the Sherman Hills Apartments in Wilkes-Barre, pleaded guilty to being a person required to comply with the Sex Offender Registration and Notification Act by reason of a sexual abuse conviction under the laws of the State of New York, but failed to do so upon establishing a residence in Pennsylvania. The indictment charged that Brant traveled interstate to Pennsylvania, established a residence in Wilkes-Barre, but failed to register or update his sex offender registration information in Pennsylvania as required by the law.
In addition to the prison term, Judge Munley also ordered that Brant be supervised by a probation officer for five years following his release from prison, that he undergo sexual offender treatment, and that he comply with all registration requirements of the Sexual Offender Registration and Notification Act.
The charges were the result of an investigation by the United States Marshals Service - Scranton and New York offices. The case is being prosecuted by Assistant United States Attorney Michelle Olshefski.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Wheeling woman pleads guilty to heroin traffickingRead the Press Release
WHEELING, WEST VIRGINIA – Angel Rae Klein, 27, of Wheeling, pled guilty today to heroin trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Klein possessed and sold heroin throughout late 2014 and early 2015 in Ohio County, West Virginia. In several instances, Klein sold heroin that contained fentanyl.
Klein pled guilty today to one count of “Conspiracy to Distribute Heroin and Fentanyl.” She faces up to 20 years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
U.S. Attorney William J Ihlenfeld, II, and Assistant U.S. Attorney Randy Bernard are prosecuting the case on behalf of the government. The Ohio Valley Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
Senior U.S. District Judge Frederick P. Stamp, Jr. presided.
West Columbia Man Sentenced for Distributing Child PornographyRead the Press Release
GALVESTON – West Columbia resident Joseph Robert Shoemake, 36, has been sentenced to federal prison following his conviction of distribution of child pornography, announced U.S. Attorney Kenneth Magidson. Shoemake pleaded guilty Dec. 16, 2015.
Today, U.S. District Judge George C. Hanks Jr. ordered Shoemake to serve 151 months in federal prison. The sentence will be immediately followed by 15 years of supervised release, during which time he will have to comply with numerous requirements designed to restrict his access to children and the Internet. He will also be ordered to register as a sex offender.
A federal grand jury indicted Shoemake Aug. 19, 2015, following an investigation conducted by the Houston FBI Child Exploitation Task Force. That investigation revealed Shoemake was making child pornography available to others through the use of peer-to-peer software over the Internet. The images included children under the age of 12 being sexually violated by adults and children under the age of 12 in positions which caused their genitalia to be displayed in a lewd/lascivious manner. Bondage involving children was also present on his computer. Several images and videos also depicted minors under the age of five.
Law enforcement executed a search warrant at the home of a third party where Shoemake was using the Internet connection at that residence to receive and distribute child pornography in an attempt to avoid detection. The examination of the computer media ultimately obtained from Shoemake revealed more than 1,229 digital images and approximately 15 videos which contained child pornography.
He has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
This case, prosecuted by Assistant U.S. Attorneys Julie N. Searle and Sherri L. Zack, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
USNCB Meets with Chinese CounterpartsRead the Press Release
On June 1st, officials from NCB Beijing and Chinese Embassy visited the USNCB. Director Shank, Chief of Staff Graham, and General Counsel Smith met with them to discuss the valuable relationship between our NCBs, and their ability to promote cooperation.
Two dealers plead guilty to Federal drug crimesRead the Press Release
CHARLESTON, W.Va. – Two defendants pleaded guilty today to federal drug crimes, announced Acting United States Attorney Carol Casto. Jamarrio Dobbs, 35, of Detroit, pleaded guilty to distribution of heroin. In a separate drug prosecution, Keri Browning, 28, of Logan, pleaded guilty to distribution of oxycodone.
Jamarrio Dobbs admitted that on three occasions in February and March of 2016, he sold heroin to a confidential informant cooperating with law enforcement. On April 27, 2016, law enforcement executed a search warrant on the residence where Dobbs was staying and seized a handgun, over $7,000 in cash, and approximately 48 grams of crack. Dobbs was arrested immediately prior to the search and he informed officers that he had swallowed several bags of heroin. Officers took Dobbs to the hospital for treatment and recovered over two grams of heroin. Dobbs faces up to 20 years in federal prison when he is sentenced on September 7, 2016.
In a separate prosecution, Keri Browning admitted that on February 4, 2016, she sold oxycodone to a confidential informant working with law enforcement. The drug deal took place at Browning’s Rossmore Road residence in Logan. Browning faces up to 20 years in federal prison when she is sentenced on August 25, 2016.
The Metropolitan Drug Enforcement Network Team conducted the investigation of Dobbs. Assistant United States Attorney Monica D. Coleman is handling the prosecution of Dobbs. The plea hearing for Dobbs was held before United States District Judge Thomas E. Johnston.
The investigation of Browning was conducted by the United States Drug Enforcement Administration. Assistant United States Attorney John J. Frail is responsible for Browning’s prosecution. Browning’s plea hearing was held before United States District Judge Joseph R. Goodwin.
These prosecutions are part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of pills and heroin in communities across the Southern District.
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Two Men Plead Guilty in Hacking, Spamming Scheme That Stole Personal Information from Millions of AmericansRead the Press Release
NEWARK, N.J. – Two men today admitted their roles in a computer hacking and identity theft scheme that hijacked customer email accounts, stole personally identifiable information (PII) from millions of people, and generated more than $2 million in illegal profits, U.S. Attorney Paul J. Fishman announced.
Tomasz Chmielarz, 33, of Rutherford, New Jersey, pleaded guilty to Count One and Count Three of an indictment charging him with conspiracy to commit fraud and related activity in connection with computers and conspiracy to commit fraud and related activity in connection with electronic mail. Devin James McArthur, 28, of Ellicott City, Maryland, pleaded guilty to Count Two of the indictment charging him with conspiracy to commit wire fraud. Both defendants pleaded today before U.S. District Judge William J. Martini in Newark federal court.
According to documents filed in this case and statements made in court:
Beginning as early as 2011, Timothy Edward Livingston, 30, of Boca Raton, Florida, and others allegedly operated A Whole Lot of Nothing LLC — a business that specialized in sending unsolicited, or “spam,” emails on behalf of its clients. Livingston’s clients included legitimate businesses, such as insurance companies that wished to send bulk emails to advertise their businesses, as well as illegal entities, such as online pharmacies that sold narcotics without prescriptions. Typically, Livingston charged $5 to $9 for each spam email that resulted in a completed transaction for a client.
Many internet service providers use filters to prevent spam from reaching their customers’ email accounts. Chmielarz admitted that beginning in January 2012, Livingston solicited him to write computer programs that send spam in a manner that conceals the true origin of the email and bypasses spam filters. In addition, Livingston and Chmielarz used proxy servers and botnets to remain anonymous, hide the true origin of the spam, and evade anti-spam filters and other spam blocking techniques. Livingston also allegedly registered certain websites used in the spam campaigns in the name of his alias, “Mark Lloyd,” to avoid detection.
Chmielarz admitted that he and Livingston hacked into individual email accounts and seized control of corporate mail servers to further their spam campaigns. For instance, they created custom software designed to hack into the customer email accounts of a company identified in the indictment as “Corporate Victim 1.” Once their email account software gained access to a Corporate Victim 1 user’s account, it created sub-accounts and used them to send out spam. By using proxy servers and Corporate Victim 1’s customer accounts, Livingston and Chmielarz were able to send out massive amounts of spam without identifying themselves as the senders.
Chmielarz also admitted that he and Livingston created custom software that exploited vulnerabilities in a number of corporate websites, including one identified in the indictment as “Corporate Victim 2,” which allowed Livingston and Chmielarz to use Corporate Victim 2’s email servers to send out spam that appeared to be from Corporate Victim 2, but in reality was from Livingston and his conspirators.
Livingston, Chmielarz and McArthur also worked together to steal databases containing the PII of millions of Americans for use in spam campaigns. In May of 2013, Livingston and Chmielarz discussed stealing confidential business information from “Corporate Victim 3,” as identified in the indictment. In an online chat, Livingston told Chmielarz, “here is the site I need scrapped (sic),” and provided Chmielarz with an address for Corporate Victim 3’s website and the login credentials for an employee. “Scraping” is a technique employed to extract large amount of data from websites.
In another online chat, Livingston told Chmielarz that the database they were going to steal from Corporate Victim 3 contained 10 million records. Livingston subsequently paid Chmielarz to write a computer program to steal the database.
From February 2014 through February 2015, McArthur worked as a sales representative at a corporation identified in the indictment as “Corporate Victim 4.” In a series of online chats in August 2014, Livingston, Chmielarz, and McArthur discussed using McArthur’s position at Corporate Victim 4 to steal confidential business information, including the PII of millions of the company’s customers.
McArthur admitted that on Aug.11, 2014, he gave Livingston unauthorized access to a remote administration tool on a computer connected to Corporate Victim 4’s network. Livingston and Chmielarz used the access to steal the names, addresses, phone numbers, and email addresses of potential, current, and former Corporate Victim 4 customers for use in spam campaigns.
In an online chat dated Sept. 3, 2014, Livingston and McArthur discussed the contents of the database that they had stolen from Corporate Victim 4. McArthur estimated that they had succeeded in stealing 24.5 million records.
The charges of conspiracy to commit fraud and related activity in connection with computers and conspiracy to commit fraud and related activity in connection with electronic mail to which Chmielarz pleaded guilty each carry a maximum potential penalty of five years in prison and $250,000 fine, or twice the gain or loss from the offense. The conspiracy to commit wire fraud charge to which McArthur pleaded guilty carries a potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing for both defendants is scheduled for Sept. 13, 2016.
Livingston is scheduled for trial on Oct. 13, 2016, before Judge Martini. The charges and allegations against him are merely accusations and he is considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation.
The government is represented by Assistant U.S. Attorney Daniel Shapiro of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit in Newark, Senior Trial Attorney William Hall of the Department of Justice’s Criminal Division Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Peter Gaeta of the Asset Forfeiture-Money Laundering Unit in Newark.
Defense counsel:
Chmielarz: Michael Koribanics Esq., Clifton, New Jersey
McArhtur: Joshua P. Cohn, Saddle Brook, New Jersey